DEAR HARRY: I have 11 percent of my pay going into my employer's 401(k) plan. It is spread out roughly evenly in three high-risk, high-reward funds. Over the last 10 years, the return has been about 10 percent. I'm 46 years old, and I'll be eligible to retire in 2022 with a full pension. Realistically, I probably will work until 2026. My 401(k) balance is about $165,000. I now am able to open a Roth IRA and also to transfer my 401(k) to a Roth. I am married with four boys (ages 22, 13, 11 and 8). I have a car payment of $240 a month, no credit-card debts, and a mortgage payment of $1,250. I often pay extra money on my mortgage principal. I could use a little help in going forward.

WHAT HARRY SAYS: You are at a point where you have to make a decision about priorities. Do you provide for retirement first, or do you provide for your children's higher education first? If you choose retirement, the transfer of your 401(k) to a regular IRA is the best first step. Do not transfer it to a Roth, because you'll get hit with a stiff tax. This will also give you access to a wider area of investments. You also should start a Roth. You have three young boys who probably will need help with their education costs in the future. This would be my No. 1 choice over saving, rather than the Roth. Contact the state Treasurer's office at 800-440-4000 for all the necessary info on our 529 plans.

Write Harry Gross at the Daily News, 801 Market St., Philadelphia, PA 19107