Seeking out alternatives to money-markets

Q: My savings in a money-market account pays less than 1 percent. Any other options for getting a better return?
J.D., via e-mail

A: Sure, but first determine how much of that money you need to have for emergencies, says Marc Freedman, a certified financial planner in Peabody, Mass.:

After you set that amount aside, the type of investment alternatives you choose will be influenced by your goals, how much risk you'll accept, and whether you need to maintain your principal, Mr. Freedman says. Ask yourself: Is the return on your money needed to support you now, or for the future? If it's for the future, how soon will you need that money?

The answers can lead you down hundreds of investing paths, from extremely safe US Savings Bonds to riskier high-yield corporate junk bonds.

Keeping it simple, Freedman suggests US Treasury securities or mutual funds that invest in government or corporate bonds or stocks, or a mix of both.

Q: I belong to the 54 percent of Americans who have not drawn up a financial plan, even though I'm nearing retirement. I have several tax-deferred accounts - (403(b), 401(k), 457, Roth IRA - plus individual stocks. Most have declined over the past three years. What criteria should I use in selecting a planner? How much should I expect to pay for a plan? Is there a "buyer's guide" of financial planners available on the Internet?
S.K., Fort Collins, Colo.

A: Finding a planner who will work for you at a price you can afford takes a little digging. But it's not too painful.

For a one-stop guide on choosing a planner, contact the Financial Planning Association (FPA) at 800-322-4237, or log on to This organization is the dominant planner-licensing group in the US, and offers lots of tips on choosing a planner. It also hands out the CFP - Certified Financial Planner - designation to planners who pass its qualifications tests.

The FPA believes that different methods used to compensate planners are right for different people. It also believes that planners should fully disclose the ways they are compensated. You'll find a discussion of various methods of compensation on the website. You'll also find sample questions to ask potential planners about their qualifications and how they would come up with a program that suits you.

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