Many Americans are dipping into their retirement savings, according to reports from retirement plan administrators. Many of us are finding that robbing Peter to pay Paul is unavoidable in the present climate, but of course, if 'Peter' is your retirement plan, this leaves your retirement fund less likely to provide you with a decent income when you retire. There's another problem too -- any money you withdraw from your plan is taxable and you could face a penalty of up to 10% if you are 59 years old or under.

Cutting short your 401(k) even for a short time isn't necessarily the best course of action to take but if you see no alternative, you need to seriously consider the long term effect that delving into your future income may bring. While retirement plan withdrawals may help out with your current financial problems, just keep in mind that retirement age shouldn't be a time you're struggling for money, so think instead about taking a loan out against your plan.

However, if it turns out you just have no choice, what else can you do to be sure your income is sufficient to pay your bills when you retire? One option is to use your property as a 'retirement nest egg'. Many of us own homes that we brought our family up in, and when they all fly the nest, may consider downsizing right away. Instead, hang onto it, because if you aren't sure your retirement plan is going to provide enough income, you can the either sell when you retire, or use an equity release scheme to free the money tied up in your property.

Some retirees are getting a 'reverse mortgage' which is basically a loan against the value of your property that you don't have to pay back immediately. The loan gets repaid when you either die or move out. The loan is then repaid by the sale of the property, which of course means you may not be able to leave your property to your children, but if you adhere to the life is for living now motto, then this may well suit you.

The main problem with such loans is that they usually give you far less than the actual market value of your property. For example, if you're aged between 62 and 69, you may only be able to get 49% of the equity in your property. Before doing anything, talk to your financial advisor and ask them to find a way out of your financial difficulties. If you trust your advisor, do what they say - even if right now it means hardship. Your advisor should have your long-term interests at heart so always take their advice before doing anything that could jeopardize your home or retirement plan.