Many Atlantans who are saving for retirement but have credit card debt may consider using those retirement savings to pay off the high-interest debt. According to data from the Federal Reserve, the average American household has $15,480 worth of debt, while more than 77 million Americans have debt in collections.

With such a staggering amount of people in debt, it’s no surprise that so many individuals consider using retirement savings to pay off their debt and ease their financial troubles. However, as explained in the recent Equifax Finance Blog article, “

Should I Use Retirement Savings to Pay Off Credit Card Debt?,” this action can prove to be a costly mistake.

Taking money out of a retirement account like a 401(k) before you are 59.5 years old means you will be required to pay a 10 percent tax penalty on that money in addition to the standard income tax. It can also bump you into the next tax bracket, meaning you’ll be required to pay as much as 40 percent more income taxes. Finally, removing the money from a retirement account early can mean you’ll miss out on the benefits of compounding interest, which can significantly increase the amount of savings you have when you retire.

For more information on other ways to pay down your high-interest debt without using your retirement savings, read the full article on the Equifax Finance Blog, where you can also find additional personal finance tips, retirement information, tax information and real estate tips.