Smart Money: Health care surcharge hard to swallow for diner


DEAR BRUCE >> I recently dined in a California restaurant and I noticed this at the bottom of the menu — "A 4 percent surcharge will be added to your check to contribute to employee health care." I had placed a 10 percent tip on the table, but after reading that the restaurant forced a tip of 4 percent into my check, I put down a 6 percent tip. What would you have done?

— Reader

DEAR READER >> I also would have objected to the 4 percent surcharge that was added to your check. I wouldn't have done what you did, but I understand why you did it, which is certainly your right.

I would point out that a 10 percent tip is really just not enough in today's world. I always tip at least 20 percent, sometimes more. The waitress/waiter would have to serve $500 worth of food to make $50 in tips, and that seems to me not a likely number for them to reach. Give it some thought.

DEAR BRUCE >> My daughter and her husband have a decent amount of money in savings and a 401(k). Her husband is a manager and the company is doing away with its pension, so he has to decide where to put his share. I suggested rolling it into the existing 401(k), but her husband wants to explore other options. What is your opinion?

— J.G.

DEAR J.G. >> The first thing I want to know is how the 401(k) is invested and how it is doing. If it's doing well, making 6 percent to 7 percent or more, you might consider adding funds to that. If it's making only 2 or 3 percent, they will never be able to live on that.

They need to involve themselves in the stock market by investing in solid American companies that are consistently growing and paying a decent dividend of 2 percent to 4 percent.

DEAR BRUCE >> My wife and I are now 70 years old and retired for the past seven years. We own our home and have savings in an IRA CD. Both of our names are on the house, and my wife is the beneficiary of the IRA CD. Other than the two cars, that's about it. We are concerned about what happens when one of us passes away.

— K.P.

DEAR K.P. >> The house is in both names, and with a right of survivorship, that should take care of that problem. Other than that, the two cars should be in both of your names with a right of survivorship. I see no reason for a living trust if you are simply going to leave everything to the surviving partner.

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