Financial Q&A: What's an old $2 bill worth?

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Q: I have a 1928 D $2 bill with a red seal and serial number. It has some folds on the bill. I would like to know what the "worth" of this $2 bill is.

A.K., via e-mail

A: You're probably holding a Federal Reserve Note, or perhaps a US Note. Either way, Patrick Mason, manager of DSS Coin & Bullion, in Omaha, Neb., says that even after all these years it's basically worth two bucks.

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"They were doing the same thing back then, too," Mr. Mason says of government printing presses that seemed to be on a 24-7 cycle. "They print, and they print, and they print."

Rarity determines worth, not just age. If you're interested in paper money that has some collector value, Mason would point you to bills that were much larger in size than those we currently tuck into our wallets. They were last printed in 1923.

He also likes bills that were printed privately by individual banks before the federal government muscled them out of the game.

Q: I am considering moving $143,000 (originally invested as $50,000) in a variable annuity from a large insurance company to another adviser. The annuity now has so many fees, and I feel that I can make more money with the new outfit. I realize that with the annuity, the $50,000 is guaranteed if the market should drop greatly. But I can't imagine how an insurance company would have the funds to guarantee if I lost $93,000. I don't have an accountant and was wondering how to determine my taxes based on this sum. Also, could I transfer some of the money into a mutual fund with the new firm and the rest into an IRA with them?

C.J.F., Memphis, Tenn.

A: It sounds to Harold Rogers, a certified financial planner in Jacksonville, Fla., that the annuity has performed well for you. Now, however, you could move the money under IRS Code Section 1035 to another annuity without paying any current taxes, and the $143,000 would be guaranteed either as an income base or as a death benefit.

With a deferred annuity, the $143,000 base would increase in each year in the next 10 in which you did not take any withdrawals. If you started withdrawing income immediately, you would be guaranteed income for life based on the $143,000. If you surrender the annuity and don't transfer it to another annuity, you'll pay income taxes on the full amount of the profit you made. This latter move would reduce your capital base that provides income, thereby reducing the amount of income you could count on.

You may or may not make more money with the new outfit, Mr. Rogers says. To prevent losing your income base, you may be limited to investing more conservatively outside of the annuity.

Rogers suggests that you investigate closely any claims that the new adviser is making money since the market has been dropping since October of 2007. It isn't impossible, he says, but you'll want to see how he did it and what risks he took.

If the existing annuity is not in an IRA, you cannot transfer from it to an IRA, except for an amount equal to the amount you earned in the tax year for which you were making the IRA contribution, Rogers says. But the annuity would provide you with the same tax-deferral benefits you would have if you did transfer to an IRA. You just wouldn't have any minimum required distributions with the annuity.

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