Q: I am writing to get some insight into our difficult financial situation.

My husband and I are in our late fifties. His company shut down in four years ago. He took the early retirement package he was offered, although he was just 54.

He found another job with good benefits, but at a much lower salary. We were doing fine, but then our daughter had a serious health problem and I had to leave my job for a year to take care of her and her family.

As a result of our decreased income, we used up all of my husband’s retirement money to pay off bills and just get by. On top of that we were forced to use our credit card and now owe close to $26,000.

I am working again and my mother-in-law gave us her mobile home to live in. We basically have no debt except for the credit card, and a revolving loan with our credit union of $3,000.

We are nearing retirement age with no retirement, no savings and a lot of debt. Our total income is under $30,000 per year. What should we do?

A: I wish I could wave a magic wand over your finances and make your debt disappear. Unfortunately, I can’t do that. You and your husband are the victim of economics (trading a higher-paying job for a new lower-paying job) and circumstances (you leaving your job to care for your daughter and her family).

I’m going to be blunt with the bad news: You and your husband probably won’t be able to afford to retire anytime soon. You say you’re nearing retirement age, but I’m guessing that you and your spouse may be closer to 70 (or 75) than 65 when you finally get to call it quits from your full-time jobs.

In the next decade or so, you both need to stash away as much cash as possible, to rebuild your lost savings, pay off your debt, and get yourselves into a position where you can retire.

Mar. 20, 2005