72 and still working. How to retire?

(Money Magazine) -- The Problem: Doris Partridge, 72, imagined she'd be retired by now. Instead she's still working part-time, doing data analysis on HIV cases for a nonprofit near her Tallahassee home. "With the changes in the economy, I didn't think it was prudent to leave," she says.

Her wages, Social Security, and two pensions -- one from her old job, one from her late husband's -- add up to $52,000 a year before taxes, so she hasn't had to touch her $480,000 nest egg. (Much of it is in equity-indexed annuities, insurance products that peg growth to the stock market with a set minimum return.)

But she's worried about those savings running out prematurely in retirement, given that she still owes $45,000 on her mortgage and would like to travel extensively.

Philadelphia-area financial planner John Sion says Partridge has a decent chance of stretching her assets over the long haul if she retires this year. But for even greater security, he'd like her to hold on a little longer.

The solution

1. Hang on for a year or two.

The $22,000 a year Partridge earns at her job allows her to leave her assets alone and save a bit too. So working even one more year significantly improves the chances of her money lasting to age 95, says Sion.

2. Pay off the house.

Her mortgage rate is a steep 7.4%. And since she's in a low tax bracket, the interest write-off doesn't buy her much. Partridge should sell some REITs, now yielding less than 7.4%, to clear the loan. Nixing the monthly payment will free up money for vacations until and after retirement, Sion says.

3. Manage the annuities.

Sion doesn't love equity-indexed annuities, as they often have hefty fees, and he wouldn't put them in an IRA, as this duplicates the tax benefits. But Partridge would lose a lot of value by surrendering now.

So Sion advises hanging on to the one outside her IRA to avoid costly tax consequences and letting the one in her IRA ride till she needs the cash, then revisiting the possibility of surrender later.