Dear Mr. Berko: 

I’m 43 years old. My wife is 47. Both of us work at low-paying jobs. Together we make about $63,000 a year and take home $53,000. We live in a small home with no mortgage and have a 2004 Toyota. We don’t have children. We don’t have any debt. During 18 years of marriage, we’ve saved $56,000. Plus, we got an inheritance of $86,000 in 2012 from my father’s life insurance. We want to invest this money to earn more than the 1.1 percent the bank pays, but we want to avoid losses, because we will need this money for retirement. My wife wanted to invest $100,000 in a U.S. government bond that pays 3.5 percent for 30 years, which would be $3,500 a year. A broker we saw told us to invest $100,000 in a variable annuity paying 5 percent. So my wife and I decided to invest half in the Treasury bond and half in the annuity. I told my brother what we were going to do, and he told us to write you. You answered his letter in 2011 and gave him good mutual fund advice. Safety is important, so please tell us whether we are making the right investment choice for retirement. 

R.D., Joliet, Ill.

Dear R.D.: 

How in this world of plenty could you have saved $56,000 from your salaries without incurring debt and own a home that’s mortgage-free? That’s not American of you, and you folks should be ashamed. One of the reasons the economic recovery is so slow is frugal folks such as you. You guys could have a lot more fun in life by spending more of what you earn. Learn to enjoy the fruits of this new capitalism. Apply for several credit cards, and stop saving part of your paychecks. Start by making nonessential purchases, such as a second car, new appliances for your home, a large-screen TV, jewelry and designer clothes. Together you have to do your part and become better consumers for the country’s economic health. And don’t worry about accumulating lots of debt or your retirement needs in 20 years, because your government will be there to take care of you.

Meanwhile, it would certainly be unwise to invest that $100,000 cash stash in a 3.5 percent Treasury bond. If you guys were 30 years older, I wouldn’t object, but at your age and stage, a portfolio of only Treasury bonds is among the worst investment mistakes you can make. Though if you folks want to eat cheap peanut butter and Spam for the rest of your lives, that’s fine. Variable annuities (which have enormous annual costs) are slightly better but not better enough to warrant a $100,000 investment. Buying a variable is like getting married, because you don’t know whether you’ve made a bad decision until you’ve lived with it for a few years. So investing 50 percent in the Treasury bond and 50 percent in the annuity is a reasonable compromise that will enable you to buy branded names such as Peter Pan or Jif and perhaps Ritz crackers. Still, no matter the brand, peanut butter is peanut butter, and after a few years, it starts to stick to the roof of your mouth. And that’s the best you can get in life with a risk-free portfolio.

If you can see your way to a slight risk, I urge you to consider a 30/30/40 split: $30,000 in the Treasury bond, $30,000 in the variable annuity and $40,000 in the following stocks, which have long histories of regular dividend increases. AT&T needs no introduction and yields 5.2 percent, and neither does Verizon, which yields 4.5 percent. GlaxoSmithKline, a $44 billion drug company, yields 5.4 percent, and Royal Dutch Shell, one of the largest oil and gas companies in our galaxy, yields 4.5 percent. Southern Co., one of our largest electric and gas utilities issues, yields 4.7 percent. Those high-quality issues, which survived the past four serious market declines with aplomb and continued to raise their dividends, should also give you modest long-term principal growth.