DEAR BRUCE: My husband co-signed on some student loans for his son, and now his son is refusing to have any part of them. At the time, my husband felt he was doing the right thing in providing his son with the opportunity to get a degree. His son abruptly quit school and never graduated. He said he would be taking care of the loans and not to worry, but when we started getting calls from the loan companies for nonpayment, we realized he was not. My husband doesn't want to ruin his own credit, so he paid what was outstanding and continued to pay monthly after that.
Fast forward three years; his son got a job. At that point, my husband asked when he was going to take over the loan payments or at least help paying on what is still out there. His son's response was that he had made some poor decisions in the past because, growing up, he had no guidance and that his father was an absentee dad. Now his priorities have changed and he would not be paying on his student loans.
We want him to take ownership of his commitments, but it looks like our hands are tied. Do we have any way to force his hand in paying on the loans or at least help? -- Torn and Hurt
DEAR READER: Unfortunately, your husband is going to have to pay on these loans if he wants to continue having good credit. The fact is there is nothing you can do to force his son to pay back the loans, and in most cases, they can't be discharged in bankruptcy.
You have a pretty rotten kid, unfortunately, and there isn't anything you can do to make this go away. You might wish to see an attorney to see if there are any avenues available, but I wouldn't want to hold out a lot of hope. Good luck.
DEAR BRUCE: I am 68, and need some advice about something I never see discussed. What does a military retiree who already receives a pension, plus Social Security, invest his ESOP payments into?
I am retired from active duty Army, with a $1,738 (net) monthly pension, plus another $903 a month (net) from Social Security. I have $15,000 in an IRA. I will get another $15,000 in December from my ESOP account where I worked. The IRA is set up in a moderate, conservative account with a 1.08 percent annual fee. I have $750 in a money market account if I need cash.
I'm wondering, should I invest in a more aggressive manner, less aggressive or stay where I am? In a couple of years, I will be 71 and will have to take mandatory withdrawals. So far, since December, the IRA has had $346 in return. I am wondering if I am missing out on making more money. There are thousands of us retired military with pensions, Social Security and probably a second pension (through an ESOP), and we don't know how to invest it. -- D.E.
DEAR D.E.: Congratulations, and thank you very much for your service. The fact that you have income from a private employer or a service pension is really not material. You have what you have.
You have $1,700 a month, plus $900 in Social Security and a little income from scattered investments. I would take any monies over and above what you require to live on and at least use a decent portion of it to increase your IRA.
You're in good shape, but you're not swimming in cash either. On the other hand, you should be spending some money on travel and whatever hobbies turn you on. As you pointed out, at 71 you will have to take mandatory withdrawals, but that money can be re-invested in retirement accounts or alternatively into something else.
Where you invest your ESOP is up to you. You know how I feel about this: Essentially, choose good American companies paying small dividends with an average of 2 percent to 4 percent growth a year. I wish you luck.
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