Credit card debt is a problem at any age, but it's especially troubling later in life. Unfortunately, 40% of baby boomers are still in the process of paying off credit card debt, according to a new survey from real estate company Clever. And that could hurt their retirement in more ways than one.

The problem with pre-retirement debt

Carrying credit card debt in the years leading up to retirement can make it more difficult to save for that milestone, thereby compromising your financial security once your career comes to a close. Imagine you're in your early 60s and are on the hook for a $400-a-month debt payment. If you're planning to retire in five years, you might struggle to add to your nest egg if your income is monopolized by that debt, coupled with other expenses.

Older man looking at stacks of paperwork while holding his head.


Imagine you didn't have that $400-a-month debt payment and could instead put that money into a retirement savings plan like an IRA or 401(k). If you were to invest that money at an average annual 5% return over five years, you'd boost your nest egg by $26,500. That's not a small amount of money to give up, especially if your savings aren't as robust as you'd like them to be.

Another issue with holding debt later in life is that you risk taking it with you into retirement. And that's problematic because once you move to a fixed income, you'll need that money to pay your basic bills, like housing, healthcare, transportation, food, and utilities. But if you're forced to part with a large chunk of your limited income, you may have no choice but to cut back on those essentials, thereby compromising your quality of life.

A better bet? Aim to knock out your debt well before you're set to retire. Otherwise, you'll risk stunting your savings' growth and suffer financially once you do leave the workforce.

Getting out of debt

You don't want to wait until you're a few years away from retirement to start tackling your debt problem. Rather, it's something you should address earlier on in life.

If you have a pile of credit card debt, your first step should be to assess your various balances, see which come with the highest interest rates attached to them, and pay your costliest debts off first. Another option is to transfer your various balances onto a single credit card with a lower interest rate overall. Doing so will make your payments less expensive and easier to manage.

Of course, you'll need money to pay off your debt, and to that end, you may need to make some lifestyle changes to free up cash. But if you're willing to cut back on expenses like dining out, leisure, cable, and other luxuries, you might manage to eke out enough savings to chip away at your debt so that it's gone well before your golden years are upon you.

It also pays to look into getting a side job if you're really loaded up with debt and cutting back on spending doesn't do enough to eliminate it in a relatively quick fashion. Since your earnings from that second gig won't be earmarked for ongoing expenses, you can use all of your extra income to pay down those credit card balances.

Though it's never a good thing to have credit card debt, the older you are, the more dangerous it becomes. If you're among the 40% of baby boomers with this type of debt, aim to eliminate it as soon as you can -- before it hurts your ability to pad your nest egg and eats up an unhealthy portion of your retirement income.