Here's a bad retirement plan: Save 10% of your income and sock it all in a safe in your garage for your golden years. If you parked $5,000 there in 1990, it would be worth something like $3,400 today. See what our friend inflation can do?

Here's an even worse system: Finance your retirement with credit cards. This may sound convenient, but it's a recipe for disaster. And sadly, it's not a far-fetched scenario that I just pulled out of a hat. According to a report at, "A third of those retired today rely on Social Security for 90% of their retirement income. That's a very serious problem because Social Security's increased only by 1.5%, but medical costs go up 15 to 20% every year. Don Hinton, a certified financial counselor, says he's seen a 50% increase in the number of seniors coming to him for help. Many are using credit cards to buy food, medicine, and pay rent."

These are scary, scary numbers. The outsized reliance on Social Security is risky, because the future of Social Security is uncertain. (Learn more in Robert Brokamp's 7 Social Security Myths.) Health-care costs increasing by double digits yearly is an alarming reality that's hard to fight. And increased credit card debt is also big trouble.

While you may reasonably hope your stock market investments will grow an annual average of perhaps 8% to 12% over a long period, credit card debt represents the opposite of that: negative growth. Your money will lose a hefty amount each year, and your wealth will quickly shrivel. Worse, credit card interest rates are not infrequently in the 20%-plus range. Sometimes as high as 40%! (And you may have noticed that interest rates in general have been trending up, not down.)

As I detailed in How to Owe $40,000 by Doing Nothing, it's incredibly easy for small debts to become enormous ones when interest rates are sky high. It's not just obscure lenders charging steep rates to some customers. Those with maximums recently between 24% and 30% include Citibank (NYSE:C), MBNA (NYSE:KRB), J. P. Morgan Chase (NYSE:JPM), Morgan Stanley's (NYSE:MWD) Discover, Capital One (NYSE:COF), and American Express (NYSE:AXP).

Don't let yourself get washed out financially and lose out on a comfortable retirement. Begin planning now. We can help you reach your dreams with our Rule Your Retirement newsletter. You'll get a new issue each month, you can read it in a single sitting, and it contains lots of valuable tips, as well as inspiration and motivation. (You've got nothing to lose and a lot to gain with our free 30-day trial.)

For further reading on retirement-related matters, check out:

Learn more in our Retirement area. And if the thought of taking control of something as critical as retirement on your own is daunting, seek the help of a financial advisor. Choose carefully, though (we offer some tips), and perhaps try our well-regarded TMF Money Advisor service, too.

Also, be smart about your credit card usage. Protect yourself from being taken advantage of by being an informed and savvy consumer. The following articles may come in handy:

If you or anyone you care about is struggling with credit card debt, head to our Credit Center, which features tips on getting out of debt, along with guidance on how to manage your credit effectively. (We even offer a spiffy Motley Fool credit card.) Really. I mean it. There's some great stuff in there, and it's all free reading.

You can also read about all things credit-related on our Consumer Credit/Credit Cards discussion board.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.