Credit card debt is a major concern for baby boomers and Gen X-ers. One solution is to tap into retirement accounts, but this move has caveats. Credit card balances have increased in 2025, with Gen X averaging $9,600 and boomers at $6,795. Experts warn of high rates despite Fed cuts.

With retirement approaching, many are considering using retirement savings to pay down credit card debt. Financial advisors advise against touching retirement accounts, but it can make sense to use them to tackle high-interest debt, especially for those living on a fixed income in retirement.

While borrowing from retirement accounts may seem risky, experts suggest it can be beneficial in some cases. Using assets to pay off high-interest debt can provide relief, but it’s important to have a clear plan to avoid falling back into debt. Consider alternatives to boost income in retirement years.

Taking a loan from a retirement account may be a good strategy to pay off credit card debt, as the interest rate is lower than credit card rates. Repaying the loan with interest to yourself can help rebuild savings. However, be aware of potential penalties if the loan defaults.

Plan loans from retirement accounts come with fees and restrictions, but interest paid goes back into your own account. While repaying a loan to yourself may be less burdensome, leaving an employer could require immediate repayment. Consider the implications before taking a loan from your retirement account.

Read more at Yahoo Finance: When raiding your retirement to pay off debt might be a good idea