Many of you may be inclined to think of debt as a young person's problem. But new data indicates that seniors are increasingly falling victim to debt as well.

Nearly 50% of seniors aged 75 and over have outstanding debt, according to the Employee Benefit Research Institute. That's up from just 25% back in 1992. Worse yet, the most notable debt increases stem from lower-income seniors who need to rely on credit cards to make ends meet.

Now the good news is that the debt carried by seniors 75 and older is primarily of the mortgage variety, and that's the good kind to have. But many retirees carry outstanding credit card balances, and some even have student debt hanging over their heads.

Senior couple reviewing documents while sitting on couch


All told, the median debt level among seniors 75 and over is $20,900, and while that may not seem like a lot, the problem is that folks on a fixed income have limited options for paying it off -- especially when we consider that the typical Social Security recipient today collects just under $17,000 a year in benefits. If you're approaching retirement with debt, you should make every effort to get rid of it before bringing your career to a close. Otherwise, you risk not only struggling financially, but carrying that debt with you to the grave.

The danger of debt in retirement

Though carrying debt isn't ideal at any stage of life, it's an even more dangerous prospect for retirees. That's because many seniors live on a fixed income, relying solely on their Social Security benefits and limited savings to get by.

Let's imagine you're looking at a monthly income of $2,000 between savings and Social Security. If you have a nagging debt payment that leaves you on the hook for $500 a month, that's a quarter of your income already spent. And then what happens when you have a month when your medical bills come in higher than expected, or you're hit with another large expense? Without wiggle room to pay your new bills, you're likely to -- you guessed it -- take on more debt.

That's why you're much better off entering retirement debt-free, even if you happen to be going in with a healthy level of savings. You never know what costs you might encounter once you stop working, and kicking off your golden years with a clean slate can help alleviate much of the financial stress so many of today's seniors face.

Entering retirement debt-free

While you can't snap your fingers and magically eliminate your debt in time for retirement, you can make an effort to pay off your various loans during the tail end of your working years. How? For one thing, take a look at your budget and start cutting some corners. This will free up more money for you to apply to your current balances.

You should also aim to pay off your costliest debts first. For the most part, that means tackling your credit card balances before moving on to things like student loans and your mortgage. Keep in mind that while carrying student and mortgage debt into retirement isn't ideal, college and home loans at least offer some tax relief (you can deduct student loan and mortgage interest if you meet certain criteria), whereas credit cards don't, which is why it pays to focus on them first.

Another option you might consider is extending your career and using your added earnings to pay down your debt. Imagine you bring home $4,000 a month after taxes and owe $20,000 in total debt. If you can get by on $3,000 a month as far as your basic living expenses go, that's $1,000 extra each month to apply to your debt payments. Therefore, if you're willing to work an extra 20 months, you'll wipe out your debt in time for retirement. And, as an added bonus, you might even end up boosting your Social Security benefits by working longer as well.

For some people, entering retirement with debt is inevitable. But if you have the ability to eliminate that debt before bringing your career to a close, you'll be much happier for it when you're older. Just as importantly, you'll lower your chances of racking up even more debt, thus curbing a very dangerous cycle that could destroy your retirement before you know it.