Downsizing might lead to entrepreneurship

Recently he was let go in an effort to downsize. He has his master’s degree in business. He has been diligently faxing and sending his resume to various companies, but no one has bitten. It’s hard to believe that a person with his education cannot find a job, when there are so many out there.

What do you think of these agencies that want to charge a fee to search for a job? – Reader, via e-mail

Dear Reader: There are many agencies that claim that they will help you seek a job and spruce up your resume, but in my opinion, these are not worth pursuing. Your husband’s age is going to work very much against him. For one thing, fringe packages for older employees are far more expensive, and it’s difficult to add a new older employee when you consider that health insurance, life insurance, etc. are far more expensive. If he has the skills, he might wish to offer himself as a consultant on a per diem basis. Once again, the ordinary overhead is considerably reduced. The final possibility is to start his own business. Faced with the same problem, many men his age have done just that, and, to their surprise and pleasure, have done very well.

Dear Bruce: I read in a recent column that the taxes on savings bonds are waived if used for education purposes with adjusted gross incomes, which are $117,750 for joint filings. We have been purchasing EE Bonds for our children’s education since they were born (starting in 1984) and now are looking to cash some of them in for their college costs. Can the proceeds be placed against room and board when they are living away from home while attending college, in addition to the tuition? – B.B., via e-mail

Dear B.B.: If the money is spent for educational expenses, and room and board are considered educational expenses, then the tax on those bonds will be waived, assuming you meet the other standards that are in place at the time the bonds are cashed.

Dear Bruce: I have read countless articles regarding 529 plans and educational individual retirement accounts. I have decided to do things differently as I have set up a Roth IRA for my children’s education, because 1) I have 100 percent control as to how the money will be used and 2) no money is in my children’s names. I plan on using low-interest loans to pay for college when they attend.

When they graduate I will decide when and how much to pay for their education based on both their needs and mine. Tell me what is wrong with this plan. – E.M., Reading, Pa.

Dear E.M.: In general, I don’t have a problem with your plan. There are some 529 plans and educational IRAs that offer few different tax consequences than your Roth IRA.

I am very much in agreement with you having 100 percent control of your money, and I also agree with you not putting money in your children’s names. The only area that is up for some question is your plan to use low-interest loans. These low-interest loans might not be available to you and your children because of your income and worth. With that point being considered, I have no problem at all and particularly applaud the idea that you have 100 percent control.

Dear Bruce: I just wanted to commend you for the comments you made regarding kids and their college educations. It’s most refreshing to see someone else who thinks parents shouldn’t go into hock to pay for their children’s schooling. My husband and I have commented to each other about the number of ads (mostly for mortgage loans) that show people sighing with relief over a refinance or an equity loan enabling them to send their kids to college. It doesn’t matter that they could spend the rest of their lives paying it off as they’re heading toward retirement while their kids, with their lives ahead of them and their presumably well-paying jobs with degree in hand, won’t have to worry about a thing. Movies and television also perpetuate this thinking.

I don’t know where this got started but I wish it would stop. Like you said, work can help a lot. – J.G., via e-mail

Dear J.G.: Thank you so very much for your kind comments. It is clear that you and I are in a minority, since such guilt trips are laid on parents to go into hock up to their eyes so their children can have an “easy time” in school.

There’s no earthly reason why a kid today can’t put him or herself through school with the appropriate effort and loans.

No, it might not be an Ivy League school, but it is a good sound education, and their parents don’t have to spend their “golden years” in poverty. What a concept!

Bruce Williams is a national radio talk show host and syndicated columnist.

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