DEAR BRUCE: I retired eight years ago at 51. I plan on applying for Social Security benefits at 67. According to my last statement 2004, I have enough credits to receive $1,510 at age 66.

The Social Security statement always says "at your current earnings," which, in my case, is my former employer's pension. I pay no Social Security from this pension. They have been informed that I retired at 51 and that my income is zero.

My question is, will the Social Security deduct money from the stated $1,510 monthly benefit because I have not worked since 1998 and delayed taking benefits until I'm 67? — Larry, via e-mail

DEAR LARRY: You won't be "penalized" because you have not worked, but your Social Security benefit will not increase because of the normal contributions someone as young as yourself would still be making. You may, however, pay income tax on your Social Security, depending on other income you have. It comes as a great surprise to many retirees that their Social Security is subject to income tax.

When it was first conceived, that would have been incomprehensible. But the powers that be determined if income combined with Social Security reaches a certain point, they would start to take away from you in the form of income tax. Imagine how far an independent insurance company would get if it decided to change the rules in the middle of the game ...

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DEAR BRUCE: My wife and I each have credit cards in our respective names and one joint account. In the event of my demise I am 80 years old, is my wife responsible for my credit-card indebtedness? I will look forward to reading your reply in the Battle Creek Enquirer. — D.M., Marshall, Mich.

DEAR D.M.: In some cases, your wife could be held responsible and in others, not. Without any question, your estate, if there are any assets, is responsible for settling your debts before the assets are distributed. It would be a good idea to get those debts paid down as quickly as you are able. The likelihood is, you will have an estate with assets and, before an estate is settled, all legitimate debts must be retired.

DEAR BRUCE: I need your words of advice. When I retired 15 years ago, I bought two mutual funds with reinvestments of dividends. I have not touched them since the purchase. At the time, I had my stocks switched to the funds. After a number of years, the broker started charging for holding them on a yearly basis. I have no record of the original purchase, and the company says their records do not go back that far. If I needed to sell, how would I go about establishing the gain without a starting price? — A.K., Las Vegas, Nev.

DEAR A.K.: If in the absence of having any paperwork, you're going to have to go back and estimate when you purchased the mutual funds. If you have a date, whether it's 15 or 20 years ago, you can easily establish the approximate cost basis, then you'll have to research from that point forward what the dividend or share increases have been. It sounds complicated, but a competent broker should be able to do that research in relatively quick time in the computer age. Your situation underscores the necessity for keeping appropriate records, no matter how long, as long as you own securities or other taxable items. The idea of throwing things out after a couple of years, in these instances, simply does not apply.

Send your questions to: Smart Money, P.O. Box 503, Elfers, FL 34680. E-mail 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.