DEAR HARRY: I'm 61 and my wife is 58. We're looking forward to retirement in five years. Our investments were always almost all in stocks, but now we're thinking about reducing our risk by getting into some Pennsylvania bonds. We're in a high tax bracket (and will continue to be after retirement), so tax-frees seem our best bet. Our stockbroker has suggested that we slowly sell off about half of our stocks and get into munis. He has suggested a period of about a year to accomplish this. He had no answer to my question regarding the timing: If it's a good idea to get into bonds, why not now? He is also very much against mutual funds, but he fumbled an answer to my asking why. Please give us some unbiased advice.

WHAT HARRY SAYS: I can understand your reluctance to wait. Stocks are pretty high now, and who knows what the next year will bring? The same is true of bonds. As long as you reinvest at the same time you sell, it makes little difference which way you go, except that you get hit for a husky income tax if you do it all in one calendar year. Because long-term bonds have a lot of risk, I would suggest you stick to intermediate-term mutual funds. Many no-load funds are out there. Get info on six or seven of them, and pick two for your investments.

Email Harry Gross at harrygrossDN@gmail.com, or write to him at Daily News, 801 Market St., Philadelphia 19107. Harry urges all his readers to give blood. Contact the American Red Cross at 800-Red-Cross.