DEAR BRUCE: I am 55 and my wife is 52. I have been unemployed for more than a year. My wife works part-time. We have $35,000 in credit card debt and $60,000 for my part of my kids’ college educations. I have $260,000 in a 401(k). I’d like to drain $140,000 from the 401(k), pay the penalty, pay the tax and retire the credit card debt. There’s a job on the near horizon and money to live on, but nothing that can get me out of this hole. I don’t think my tax rate as a senior will be any lower than what I pay today, because I think taxes are going to skyrocket due to the national debt. I also think the dollar will be worth less because we’re printing so many bills. What are your thoughts? — D.F., Pittsburgh

DEAR D.F.: I find it difficult to endorse some of your plans. The $35,000 in credit card debt I will address first. The likelihood is that the interest rates you are paying are far greater than what you are earning in your 401(k). Paying off the credit card debt may be a decent decision. The $60,000 for your kids’ college is absolute nonsense. It would be nice if you could afford that, but you and your wife aren’t young. I don’t think you should pay for your kids’ college education. Try to help them apply for grants, loans, etc.

The idea of taking so much out of your relatively modest 401(k) is disquieting. Paying the taxes and the $35,000 in credit card debt I could live with, but not any of the other expenses that you are facing.

Being unemployed for more than a year certainly has made a huge dent in your resources.

I know there are lots of folks out there who would seriously question my judgment regarding the kids’ college fund, but while it’s important for them to get an education, it’s also important for you not to impoverish yourself. I don’t see a lavish retirement on your horizon.

DEAR BRUCE: Most advisers/writers frighten some folks unnecessarily. Financial requirements vary across our great country. Us good ol’ Midwestern flyover people who live in smaller communities have a much lower cost of living than large cities on either coast. That’s the main reason most of us do not even care to visit them, never mind that most of their residents are rude and unhappy people. Here we can have a complete breakfast with bacon and coffee for under $5, half the price of the big-city breakfast without coffee. In Fort Wayne, Ind., for that same $10, you can get steak, eggs, potatoes, toast and coffee, and it comes with a hug and a kiss. A new 2,500-square-foot house on a large private lot costs $150,000. Can’t touch that in the big cities. About the only things we pay the same for are cars. As you can see, we live quite well on much less than the big cities on either coast, hence we need less in our retirement savings. Remember that we get the same amount of Social Security and Medicare benefits as all Americans. Just a few of my thoughts. — T.E., Fort Wayne, Ind.

DEAR T.E.: I cannot agree with all of your comments. First of all, the large cities on the coasts are not akin to Sodom and Gomorrah. I have found that the people who live in these places are, for the most part, no more impolite than folks from other parts of the country. That includes the “good ol’ Midwestern flyover people.” While a big-city breakfast without coffee can cost more than $5, I’m wondering about the $10 steak, eggs, potatoes and toast breakfast. I don’t think the prices in the chain restaurants vary 50 percent. I’m sure there is a little variation in price, but it’s not that substantial. There’s no question that real estate in many cases is considerably less expensive. On the other hand, there are parts of the country that have taken it on the chin with real estate just like the folks on the coasts. You mentioned that the only things you pay the same for are cars. How about the gas? You say that Social Security and Medicare are the same all over the country. This is an anomaly that many think should be adjusted.

It’s nice to know there are folks out there who are content with what they have.

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