Dear Dave,

My husband and I are retired, we both receive nice pensions, and we owe $46,000 on our home. This is our only debt. I’m 65, he is 82, and we have more than $800,000 in variable annuities, along with substantial cash in savings. We also have $200,000 combined in life insurance coverage. If we cancel these two policies we can pay down an extra $10,000 a year on the house. Should we cancel the life insurance policies?

— Anna

Dear Anna,

At 82 and 65, you probably won’t be able to get any more insurance at a decent price. If you get rid of it, you’re going to be without it. The good news is that you have enough money through your pensions, investments and savings to be what is known as “self-insured.” If I’m in your situation, I’d drop the life insurance policies and pay off the house as quickly as possible. Make sure you keep a good health insurance policy in place because a hospital stay can eat your savings alive. I hope you have long-term care insurance, too. Good question, Anna. You guys have done a great job with your money!

— Dave

Dear Dave,

In 15 months, I’ll be able to buy in as a shareholder of my firm, about 1.5 percent of the company. I make $100,000 annually, and it will cost me three times my income, but it could increase my income by as much as $40,000 a year. I know that you discourage single-stock investing, but do you think this is a good idea?

— Mark

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Dear Mark,

This sounds more akin to a partnership than a stock. Basically, you’d be a minority shareholder in the business. That means zero power. Whatever money you put up could be lost because the people running this business could decide to close up shop and you’d be powerless to stop it. To me, this is way too scary. You’d be making a $300,000 investment that has no liquidity and that you can’t sell on the open market. I’d want to see at least a 30 percent return on my capital in a situation like this, so I wouldn’t risk my money. Keep your good job, but politely decline this shareholder offer. That’s my advice.

— Dave

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