DEAR BRUCE: Can you explain to me what a federal gift exemption is? — Gina

DEAR GINA: It’s very simple, Gina. You are allowed to give any one individual $14,000 each year without triggering a gift tax. If you give more than that to one person, then there will be a gift tax penalty.

DEAR BRUCE: Many years ago, my wife and I bought $10,000 of Microsoft shares. At today’s price, that investment is worth $70,000. We wish to remove $50,000 from that investment as a protection against a market drop. Where should we place the $50,000 that is safe and not affected by market swings, and pays some interest? — P.P.

DEAR P.P.: You want to protect part of your investment, and I have no problem with that. As to where you can put the money and keep it safe, that’s an entirely different matter.

That’s the reality. My advice, which I frequently give, is to find a few companies with long- standing histories that will be around in the future and that pay 3 percent or more in dividends, which is not too shabby. These stocks will go up and down, but in the long run, over time, they’ll go up.

DEAR BRUCE: I have a universal life insurance policy for $100,000. I am now 76 and the premiums are more than the policy generates at 4 percent. The policy has a surrender value of $56,000.

Should I take the $56,000 and surrender the policy, or keep it and let the cash value plus interest continue paying the premiums? Premiums increase each year as I age. I realize that there is a tax liability, but my income per year is about $40,000 with my retirement and Social Security. — G.S.

DEAR G.S.: The important question is, do you need the additional insurance? If that’s not the case, you might want to take the $56,000 cash and invest the money in a decent stock or two. Unless you’re in a shaky physical condition, I would be tempted to unload the policy and invest the money. Good luck.

DEAR BRUCE: I understand that the choice between a 3.25 percent mortgage vs. 8 percent return is a no-brainer, but please give us some ideas about where to be making 8 percent on our money right now. I always enjoy reading your column. — T.D.

DEAR T.D.: The question you ask is one I get by the dozens: How do I make 7 to 8 percent without taking any risk? The answer is: I don’t know of any way to do that.

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