Dear Liz: I have a terrible habit. I’ve been clean and sober for 24 years now, but I’m a gambler. I’m in debt over $100,000. Yes, it’s bad, but it used to be worse: I owed $204,000 to banks, loan sharks, family members, you name it. In the last seven years I’ve been able to cut the debt in half, but when I’m done paying off the debt I’ll be 62 with no savings and no 401(k) plan. I’ll get a pension from my work of about $3,400 a month and $1,400 from Social Security. I’m afraid $4,800 a month will not be enough for me. Is there anything I could do now to make things better?
Answer: You don’t have a habit. You have an addiction. And it’s not clear you’re dealing with it, since you refer to yourself in the present tense as a gambler. If you’re still gambling, all your efforts to pay off your debt and build a financial secure future for yourself are likely to be pointless. Although $4,800 a month is more than most people have in retirement, you’re right that it won’t be enough to feed your addiction.
If you haven’t already, consider checking out Gamblers Anonymous, a 12-step program based on the principles of Alcoholics Anonymous.
Anyone who wants to build a retirement fund can contribute to an individual retirement account (IRA) or Roth IRA, as long as the person or the spouse has earned income. You can contribute up to $5,000 a year if you’re under 50, or $6,000 if you’re older. Liz Weston is “The most-read personal finance columnist on the Internet” (Nielsen/NetRatings) and author of “The 10 Commandments of Money” and “Your Credit Score.”