5 Signs That You'll Never Be Able to Retire

It’s a common problem: Fifty-one percent of consumers polled by J.D. Power over the past year say they maintain high-interest revolving debt on their credit cards. That rises to 69 percent among respondents classified by the company as “financially unhealthy” due to their spending and saving habits, creditworthiness and other criteria.

“The average person is thinking, I have all these bills, I have all these debts, where and how will I fit in retirement savings?” Parks says. “That’s a red flag.” 

What can you do? When it comes to paying down credit card debt, the good news is there are several strategies you can employ. The key is knowing what will keep you motivated. 

For example, there’s the snowball method: You pay off your smallest debt first, then apply the money you were putting toward that to the next smallest, working on up to your biggest debt. This works well for people who need small wins to stay motivated. Or there’s the avalanche method, where you pay off the debt with the highest interest rate first, thus reducing your interest payments over time.

If your debt is relatively modest but persistent, Parks recommends a 50/50 strategy: Split your disposable income between debt payments and contributions to a tax-advantaged retirement plan like a 401(k) or individual retirement account (IRA). “It may take a little longer [to pay down the debt], but at least you have parallel tracks running,” he says. “You don’t want to pay down the debt and then begin saving.” 

Whichever method you choose, it’s important to budget to go beyond the minimum monthly payment. If you are struggling to pay your debt and need help, the nonprofit National Foundation for Credit Counseling can help you find a free or low-cost counselor in your area. 

3. You haven’t saved

It’s hard to save for retirement when there’s a mortgage, car payments, student loans and a whole host of other expenses to contend with. If this sounds familiar, you’re not alone. In a recent Credit Karma survey, 25 percent of Generation X respondents and 27 percent of boomers said they had nothing saved for retirement. 

But without some amount of retirement savings to draw income from, you’re left to rely largely on Social Security — which only replaces about 40 percent of work income, on average, according to the Social Security Administration — and the value of your home, if you own it. Will that be enough to last through your retirement years?

What can you do? It’s never too late to start saving for retirement — and for emergencies, so you don’t have to tap that retirement money if disaster strikes. 

Financial pros recommend having at least three to six months’ worth of expenses in the bank as a rainy-day fund. After saving that, funnel any money you can into a retirement savings plan, be it job-based like a 401(k) or a personal account like an IRA. 

Even if you can only put $50 away from each paycheck, that’s far better than nothing, because of the power of compounding — the money you put earns investment returns and interest. The bigger your nest egg, the faster it grows.  

“You need a plan to know what your retirement costs will be every year and what you’re spending, factoring in inflation,” says Russell Gaiser III, a financial adviser with The Financial Guys in western New York. “You have to run the math and have a plan. Maybe it means sacrificing the now a little bit.”  

4. You’ve saved but haven’t reached your goal

Perhaps you’ve heard the conventional wisdom that you need to replace at least 80 percent of your work income to live comfortably in retirement. Or that $1 million in savings is the sweet spot to exit the workforce. Both may be worthy goals, but they don’t account for your unique situation. Everybody is different; one person’s ambitions for retirement might require $1 million, and another’s might not. 

“People have not formerly estimated how much they need to save,” says Catherine Collinson, CEO and president of the Transamerica Institute, a nonprofit research organization funded by the Transamerica Life Insurance Company and its affiliates.  ”It’s impossible to chart a road map if you don’t have a destination.”

What can you do? Don’t get fixated on an artificial number. Do your homework: Figure out how much money you’ll need to live the retirement you want and how that matches up with the income sources you’ll have. Armed with a realistic number, you’ll have a better sense of whether you can take the leap and retire or need to work a few more years to shore up your finances. 

“People need to focus on lifetime income. Don’t worry so much about the big dollar figure. Ask yourself what you have available to produce income,” Parks says. “Pensions and Social Security counts, earnings on investments counts, spending a little of your principal counts and getting a part-time job for the first 10 years of retirement counts.”  

5. The idea of not working is depressing

Maybe you’ve done everything right in terms of saving for retirement, but the idea of not working is stressing you out. That could be a telltale sign you are not ready to retire, and you may never be — and that’s OK. 

What can you do? Just because you reach a certain age doesn’t mean you have to stop working. If you’re healthy and your job brings you joy, why not keep chugging along? Working can give a way to keep busy, a sense of self-worth and the means and opportunity to socialize and interact with others, all of which can help prevent boredom and loneliness as you age. 

“It goes back to thinking about what gives your life meaning and not losing sight of that,” Lester says. “Be clear-sighted about what you are doing for love and what you are doing for money.”