overwhelmed by your debtThe statistics are truly dismal: half of near-retirees have nothing saved. Many believe they'll never be able to retire at all. Among those playing retirement savings catch-up, and even among those who know they have enough, confusion about when it's time to retire abounds.

Money is vital for a comfortable, happy retirement. If you're nearing retirement age and own your own home, but have no idea how you're going to fund your retirement, one option is to look into a reverse mortgage. This offers you reliable income tapped from the equity in your home. Money isn't the full picture, though, and even a reverse mortgage can't make up for decades spent failing to save for retirement. If you're not sure whether you're ready, here are five signs you need to wait.

You're Depressed on Weekends

For many Americans, work offers a source of identity—or a break from a stressful home life. If yo find yourself depressed or with nothing to do on weekends, you're not ready to quit working. Instead, focus on what would make your weekends better: more leisure? A happier marriage? Less structure? Then work on cultivating that before you finalize your retirement plans.

You Don't Know How Much Money You Need

Average retirement savings among Baby Boomers over the age of 60 is just $50,000. If you don't have enough saved, you're certainly not alone. But if you don't know how much money you need to retire, then how can you possibly know if you're ready? Retirement requires careful financial planning, and if you haven't dedicated any time to this activity, you're not ready yet. Sure, it's scary to think about how much money you need. It's even scarier to run out. Spend some time on this issue now, so that you don't have to spend your retirement in poverty or panic.

You Don't Have a Plan

Times have changed. The ability to count on a comfortable retirement has gone, and many people continue to work well into retirement. It's unsurprising, then, that so many people struggle with saving enough money. Twenty-nine of people over the age of 55 have no retirement savings and no pension plan. Lots of people struggle with saving up enough money. Many near-retirees spend their final working years socking away as much money as they can. There's no shame in playing catch-up, nor in having to delay your retirement a bit. But if you don't have a plan for saving enough, have no idea when you'll have the money you need, or no clear goals for how you would like to spend your retirement, you are not ready.

You're in Debt

The senior years used to be a time of relative financial comfort. Today, seniors carry 50% more debt than young people. If you're in debt, you're paying interest on money that's not yours every month. That directly affects your ability to retire, and can sap your retirement savings. Financial advisors often debate whether paying off debt or saving is more important, but one thing is for sure: you should not retire if you have debts you cannot afford to pay down. Doing so means you start retirement in a hole, and that hole can get larger and larger as your income shrinks and your retirement savings dwindles. Find a way to get out of debt now, while you still have reliable income.

You Have Unfulfilled Work Dreams

Not every dream has to be paid; you can begin working on that novel in your spare time, or paint a gorgeous mural to beautify your community. If there's something you want at work that you have not yet achieved, the time to go after it is now. Regret can last a lifetime. And while there are no guarantees in today's cutthroat climate, you might be happier if you spend a few extra years trying to achieve that final career milestone.

Annie Doisy is a reverse mortgage expert who helps seniors enhance their lives by taking advantage of the equity in their homes. Annie writes for where her goal is to educate consumers on a wide range of topics around mortgages and other financial services.


1 Comment

I've never been in major debt in my life, mainly for one overriding reason: I don't like the idea of owing anyone money.

I'm in favor of good debt — such as getting a mortgage to buy a home, or a student loan to attend college, up to a certain point — but owing a company or someone money has always left me with a nagging feeling. I'm even happy to pay an annual fee for my rewards credit card so my family can use the reward points for free hotel rooms during vacations — but only because we pay the monthly bill off on time and don't pay interest.

Here's an example of how crazy I am about avoiding debt, even though it was only $20 from a friend:

In August I went with my daughter to her middle school for orientation, which included buying gym clothes. I mistakingly thought a credit card would be allowed to buy the items, so I left my checkbook at home and didn't bring cash.  When I found out that only cash or check were allowed, I borrowed $20 in cash from a friend who was there with their daughter so that I didn't have to return to the school and buy the stuff later.

A few hours later, I made a point of going to an ATM to withdraw $20 and deliver it to my friend. It was an obligation I wanted to fulfill that day, partly because I wanted to thank them for the quick loan, and also so I wouldn't forget to pay them later.

My point is that even with a small amount of debt between friends, debt can be a bad habit that can easily get worse before it gets better.

Saving for a nest egg of debt

I have a desk calendar from The Onion, the satirical news site, and a recent entry had this headline: ...continue reading


college educationWith their children facing an average student loan debt of $33,000 when they graduate from college, some parents are helping by saving for their kids' college education in various accounts.

They mean well, but they may be doing themselves and their children a disservice with less money saved and less tax relief.

Along with the traditional ways of saving for college with a 529 or a Coverdell Education Savings Account, parents are also saving for a college education through savings accounts and their retirement plans.

45% save for college in savings account

A recent study by T. Rowe Price found that 45 percent of parents saving for their kids' college education are using a regular savings account, and 30 percent are using their 401(k) retirement account.

The study found that 31 percent are using a 529 account that's designed to give them the most taxable savings when saving for college. ...continue reading