Q. As an 82-year old American Airlines retiree, I am concerned about my financial future. My assets include a paid for home appraised for $250,000, $11,000 in an IRA earning 2.5 percent, $150,000 in my credit union share account earning 2.5 percent, and $50,000 in an Equitable Life annuity earning 4 percent. I have no debt, no dependents, a 2000 Ford Taurus, and a nursing home insurance policy from Bankers Life.

My pension is $17,000 and Social Security is $13,000. If American Airlines goes into chapter 11, the worst scenario is that I may have to live on my Social Security.

My choices? Sit tight. Or put $25,000 into a charitable gift annuity with Presbyterian Health Foundation offering 9 or 10 percent. Or make two $25,000 investments in Dreyfus funds. One in Dreyfus Premium GNMA C shares, the other in Dreyfus Premium Cord Bond fund C shares--- both suggested by an American Airlines Credit Union consultant.

I have preferred leaving assets with the credit union since I have little aptitude for hands on management. Obviously, long-term investment is not feasible. Your comments?

---M.A., Dallas, TX


A. Don't give up on your alma mater just yet. Remember, while those with large pensions (Over $43,977.24 a year) will face reductions if the company offloads its pension obligations to the PBGC, smaller pensions are more secure.

Let's start with the big picture.

You've got $211,000 in financial assets, you're 82 years old, and your life expectancy is a bit less than 8 years. Even if you didn't earn a dime on your financial assets and you lived another 16 years to age 98, you could afford to spend over $13,000 a year from your savings--- and you'd still have the $250,000 value of your house as a "back-up" asset.

This tells me you can afford to "sit tight."

Next, let's eliminate the mutual funds recommended by the credit union advisor. Both of these funds rank a single star from Morningstar, the lowest of the Chicago data firm's rankings. Another fact, however, is more important than their Morningstar rating.

Both of these funds have terrible records when measured against their competitive peers.   If the advisor showed you the record you would learn that Dreyfus Premium GNMA C shares has been outperformed by at least 90 percent of comparable funds over the last 12 months, 3 years, 5 years, 10 years, and 15 years. This is, truly, a fund with no reason to live. The other fund, Dreyfus Premium Core Bond C shares, is nearly as bad.

The charitable gift annuity, on the other hand, is a good idea. It will bring you an immediate tax deduction. It will provide you with a high lifetime income. It will compensate for the low income from your other investments. And you won't need to worry about it very much.

This is the kind of simplifying you should be doing at your age. Even if you enjoyed the challenge of investing, which you don't, you should be getting your investments down to very broad-brush strokes.

One other thing: an unsolicited suggestion. If you are concerned about the care and maintenance of your house, about living alone, or about who will help if you fall, etc.   This is a good time to investigate a Continuing Care Community such as Presbyterian Village in Dallas. You'd be able to live independently for as long as possible, have ready and certain access to care, and you'd be able to shuck the chores of owning a home. By joining such a community while you were still healthy you'd quickly build a network of friends, care, and support.

Let me put it another way.

Thou shallt not live by investments alone.

What we often forget is that money and assets are only instruments, tools we use to achieve the security we seek. The really important decisions are more about how we live than how we invest.