(MONEY Magazine) – Q. I'd like to retire in two years, when I'm 55, and draw $18,000 a year from my Individual Retirement Account to live on. But when I start collecting Social Security at 62 I won't need the IRA money, so I'd like to suspend withdrawals at that point. I know the law will require me to take money from my IRA again when I'm 70 1/2, but is it okay to interrupt withdrawals the way I've described? Mike Roden BOUNTIFUL, UTAH

A. Interrupting your withdrawals is not a problem. The Internal Revenue Service allows early retirees to tap their money penalty-free as long as they continue withdrawals for at least five years or until they turn 59 1/2, whichever comes later. (Otherwise, you pay a 10% penalty on money you take from an IRA before age 59 1/2.) Your plan clears that hurdle.

But in return for allowing you early access to your stash, the IRS demands that you base your withdrawals on one of its three formulas for computing installments over your life expectancy. So the amount you can take out will depend on your age, your IRA's balance and current interest rates. For you to be able to draw down $18,000 annually between 55 and 62, for instance, you'd need roughly $201,000 in your IRA. And be very careful to follow the IRS guidelines: If you ever take more or less than the formula allows, the IRS will hit you with a penalty equal to 10% of everything you have withdrawn to that point.

Q. Thirty years ago, I started giving a one-year bank certificate of deposit to each of my newborn grandchildren. I'm 82 now, and I have 20 grandchildren and great-grandchildren. I like to shop around for the highest rates, but renewing those certificates every year is getting to be a big job. I want to keep separate accounts in each child's name because the older ones have accumulated more money than the younger ones. Can you suggest an investment that will be just as safe but a lot less bother? Samuel Brand BROOKLYN

A. What a shame your generous gesture has become as exhausting as playing horsy. Here's an idea that may lighten your load: Instead of chasing after the highest-yielding CDs, put the kids' money in balanced mutual funds that blend stocks and bonds. Unlike CDs, mutual funds aren't government insured. But the kids have plenty of time to ride out any rough patches in the financial markets--and build on the extra 2.5% to 7% that bonds and stocks traditionally deliver over CDs. Stewart Welch, a financial adviser in Birmingham, suggests three no-load funds: For the older kids who have more money, Dodge & Cox Balanced (13.8% three-year average annual return as of Jan. 31, 1997; minimum investment: $2,500; 800-621-3979) or Vanguard Wellington (15.4%; minimum: $3,000; 800-662-7447). For the younger ones with smaller nest eggs, he advises Invesco Balanced (20.6%; minimum: $1,000; 800-525-8085).

Q. I understand there's a mutual fund that invests in the stock of companies that have received the Baldrige Quality Award for outstanding management. I'm dying to own such a fund because it's got to be a winner, but I haven't been able to find it. Can you help? Terri Bodhaine BOULDER

A. Gee, if only there were a fund like that! The Commerce Department's National Institute of Standards and Technology (NIST) division oversees the prestigious award, established in 1987 and named after late Commerce Secretary Malcolm Baldrige. Last December, the NIST examined the stock market performance of companies after they, their divisions or subsidiaries received the award. It found that from 1988 to 1996, the 14 publicly traded Baldrige winners--including AT&T, Federal Express, IBM, Motorola and Xerox--gained 325%, vs. 112% for the S&P. Newspaper reports of this study may have led you to believe there was a mutual fund that owned only Baldrige Award stocks--but alas, no such fund exists. Moreover, we checked to see whether there was a fund that included all 14 stocks in its portfolio and came up empty.

So if you want a portfolio of those high-quality stocks, you'll have to build it yourself. John Markese, president of the American Association of Individual Investors, notes that buying 10 shares of each company will cost you roughly $9,000. Brokerage commissions--even at a discount firm like Charles Schwab--will add at least $437--a substantial 5%--to your outlay, but if the performance of these stocks holds up, that's a small price to pay. The other companies are Armstrong World Industries, Corning, Eastman Chemical, General Motors, GTE, Solectron, Texas Instruments, Westinghouse and Zytec.

Q. Several years ago, a member of our congregation gave the church an undeveloped lot in an Arkansas resort called Fairfield Bay. The church has been unable to sell the property because the developer went bankrupt. In the meantime, we have to pay dues of $18 a month to the community and $20 a year in taxes. I realize $236 a year is not a lot of money, but I'm afraid we'll be paying it until the Second Coming. And I have another reason for writing: I own a lot in the same resort. Any advice? James Pritchard MEMPHIS

A. Thank God the lots weren't at Whitewater. But unfortunately, neither you nor the church has a prayer of finding a buyer anytime soon. There are 16,000 parcels in Fairfield Bay, 14,500 of which are as bare and available as yours. However, Jim Preston, a vice president of the resort's board, says that if the church stops paying dues and taxes, the community would reclaim the lot in default and "probably do nothing further," in deference to the church's nonprofit status.

That charitable attitude does not extend to individuals, however. If you default on your lot, the community will pursue you for back payments. But things may not be as bleak as they look. Fairfield Bay is a pretty spot, and a four-lane highway connecting it to Little Rock is under construction. When the road is finished in three or four years, the state capital will be less than an hour's drive away, rather than 90 minutes as it is now. Such improved access from Little Rock may boost the area's appeal--not to mention your lot's. And by then, who knows? They've got to build the Clinton Presidential Library somewhere.

Reporter associate: Barbara Solomon