If Investing Is Mutual, Think Ira

Got some cash to put into a mutual fund? At this time of year, you may get a tax benefit by putting money into your retirement account instead of a regular account.

People with individual retirement accounts can wait until mid-April to make contributions for the 1995 tax year. So you could invest in a non-IRA account now and still have plenty of time to make your IRA contribution for this year.

But December is when most mutual funds make their capital-gains distributions - giving shareholders the profits the funds made on securities they sold during the year. A fund’s share price today includes the distribution that will be made next month. When the distribution is made, the share price will drop by the amount of the distribution.

So if you invest in a mutual fund today, you won’t make any profit on the distribution - after the distribution, your share price plus distributions will equal what you paid before the distribution.

Nevertheless, you’ll have to pay capital-gains tax on the distribution. To avoid this, you can postpone your mutual-fund investment until after the distribution is made. But then you might miss out on any rise in the fund’s share price between now and the distribution date.

Consider buying the shares for your IRA account. These are tax-deferred, and you won’t have to delay investing until after the capital-gains distribution is made.

Pay bills directly

Sick of writing checks?

Well, paying bills may be unavoidable, but you can make the process easier - and save a little on checks, stamps and envelopes.

The Federal Reserve Bank of Philadelphia suggests you consider direct payment. This allows your mortgage company, utility or firm that made your car loan to draw its payment directly from your bank account.

To set this up, you generally need to give written authorization to your bank and the payee. Check first with the company that is to receive the payment to make sure it offers the direct-payment option.

For more information, call the Fed at (215) 574-6458.

Sexes invest alike

If investors with mutual funds managed by Scudder Investor Services Inc. are any indication, the conventional wisdom that men are more aggressive with their money than women is a myth.

A breakdown of investments by fund types shows only nominal differences between the sexes. For example, 65.8 percent of men and 64.2 percent of women were invested in Scudder’s growth funds, the riskiest segment.

Conservative money market funds attraced 4.8 percent of men, 5.5 percent of women.

Isabel Ford, Scudder’s retirement plan product manager, suggested women may need to become more aggressive than men because of they tend to fare more poorly in retirement.

Median monthly benefits for men are $7,020, for women they are $2,570.

While men are advised to work towards a retirement income of 60 percent to 80 percent of their pre-retirement income, women may need 100 percent of income because they earn less and live longer.

Families silent on money

Does your family talk finances? Too few do, according to a survey from Prudential Securities.

Although parents and adult children say they know matters like money and inheritances should be discussed, more than half add that the topics are difficult to broach.

“The hardest part … is getting important financial conversations started,” said Ronna Lichtenberg, a Prudential senior vice president. “Health care issues, bequests, and control over one’s life are delicate, thought-provoking issues; careful thinking and planning can help make the process easier.

“It can make the difference between living the life you want, or living the life others think you want.”

She said early discussion of these topics better prepares all family members for their futures.

, DataTimes