An article in the Wall Street Journal (Debt Hobbles Older Americans, 9/7/11) paints a sobering picture of the impact that rising debt levels have on people’s retirement plans.

Thirty-nine percent of households headed by people aged 60 through 64 had primary mortgages in 2010, up from 22% in 1994. The median value of mortgage and home loan debt, adjusted for inflation, for homeowners aged 60 to 62 also increased, from about $40,000 in 1994 to $80,000 in 2008.

Housing price declines have made it more difficult to pay off these mortgages, forcing people to work longer before retiring.

Another issue hurting retirement plans is that people just are not saving enough. An earlier Wall Street Journal article (Retiring Boomers Find 401(k) Plans Fall Short, 2/19/11) showed that the median household headed by a person aged 60 to 62 with a 401(k) account had less than one-quarter of what was needed in that account to maintain its standard of living in retirement, defined as 85% of their working income. This is after taking Social Security into consideration.

To decrease the possibility of having to postpone retirement, start saving as soon as you can. Consider saving more of your income (12% to 15%, including any employer contribution, or higher if you can). If you are over the age of 50, and are able to, take advantage of the additional $5,500 you can contribute to a 401k plan above and beyond the $16,500 pre-tax contribution limit.

A variety of methods can be used to help pay down your mortgage prior to retiring. Use a portion of any bonus or raise towards the mortgage. With interest rates so low, consider refinancing from a 30-year to a 15-year mortgage. Think twice before drawing upon a home equity line.

Having more savings and less debt will give you much greater flexibility and control in deciding when to retire.