DEAR BRUCE >> We own a rental property in Florida that we bought at the top of the market for $250,000. The current loan balance is $171,000 at 6.875 percent. The property is now worth about $130,000. The monthly payment is $1,313 and rents are $1,500.

My question is, do we put extra money into the principal? Selling doesn't appear to be an option, but it stays rented and runs along basically trouble-free. I won't have a gain if I sell it, but will eliminating or reducing the principal mess us up tax-wise when I do dispose of it? I could pay down the principal by $20,000 to $30,000.

— S.M.

DEAR S.M. >> Seems to me that doing nothing is about what you ought to do. You tell me it's renting and trouble-free. You won't have a gain if you sell it, but you also won't have a big loss. How is it going to help to pay down the principal? As long as it is carrying itself (which is amazing, when you consider that the value has dropped), I would keep doing what you're doing and count your blessings.

DEAR BRUCE >> My husband and I have been interviewing financial advisers and are having trouble choosing one. We have interviewed four, all fiduciaries. All have recommended annuities. However, my research indicates that annuities have drawbacks.


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I understood that fiduciaries are supposed to have our best interest at heart. We have plenty of income, no debts and substantial IRAs. I don't know whom to trust, to be honest. I'm leery of annuities. Our last financial adviser, also a fiduciary, invested our funds so that we made less than 5 percent a year. How can we find someone we trust?

— S.S.

DEAR S.S. >> It would not be unheard of to have one or two of the financial advisers recommend annuities, but since they're fiduciaries, it's hard to believe that four out of four of them are concentrating on annuities. It may be that yours is a special situation that calls for that.

That having been said, I would try one or two more advisers. If they continue to recommend annuities, I would mention that the last adviser invested your funds so that you made less than 5 percent a year. (The 5 percent is not unusual in today's world, where banks are paying less than 1 percent). Try a few more advisers and go from there.

Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.