How your credit card debt can get in the way of your retirement savings

Working Americans rank credit card debt as one of the top challenges to their ability to save for retirement.

That’s the finding in a new surveyconducted over the summer by Goldman Sachs that included more than 1,200 people.

Melinda Opperman, president and chief relationship officer for the nonprofit Credit.org, wasn’t surprised by the research.

“Every dollar someone must put toward debt repayment is a dollar they can’t set aside for retirement,” she said.

CNBC spoke to experts about how those with the debt can still try to build a nest egg.

No; abandoning either goal is a bad idea, experts say.

“There are consequences for not paying off credit card debt today, while not saving for retirement sets one up for more pain down the road,” Opperman said.

If you make only the minimum payments while carrying the average credit card balance of $6,300, with around a 17% interest rate, it’ll take you close to 18 years to be out of the debt.

And by then, you’d have paid more than $7,600 in interest, according to calculations by Ted Rossman, senior industry analyst at Creditcards.com.

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Meanwhile, delaying saving for retirement will have huge costs, too.

If you began saving $200 a month for your older years at around age 20, you’d have $570,000 at 65 (assuming an annual return of 6.5%). If you waited until 25 to do this, you’d have $435,000.

And if you waited until 37? Just $180,000.

Because interest rates on credit cards are so high, experts say you should at least pay more than your required obligations.

“Minimum credit card payments are almost always a bad idea,” Rossman said. “It’s really hard to build any sort of wealth if you’re paying that much in interest every month.”

At the same time, though, you want to be saving something for retirement.

“It’s hard for people to change their habits, so don’t ever stop saving entirely,” Opperman said.

Even if you have just $20 deducted per pay period, “it can add up and you likely won’t miss it coming out of your paycheck,” said Carolyn McClanahan, a certified financial planner and director of financial planning at Life Planning Partners in Jacksonville, Florida.

“Through the magic of compound interest, saving just a little on a regular basis can grow to a ton of money to serve as your future nest egg,” McClanahan said.

If your employer offers a 401(k) match, you should try to contribute enough to get the full benefit, Rossman said.

“That’s a 100% guaranteed return — it’s free money,” Rossman said.

To free up more money with which to save, you can apply for a 0% balance transfer credit card, Rossman said. These cards, for a fee, offer you up to 21 months of no interest charges.

“You might be able to pay down your debt without monster interest charges and still carve out some retirement savings along the way,” he said.

Without credit card interest payments, you may even be able to up the percentage you contribute to your 401(k) or other retirement savings account.

Opperman says no.

“The penalties for cashing out early are too steep to make it worthwhile,” she said.

Withdrawals from 401(k) accounts before age 59½ are subject to a 10% penalty and taxes.

That means if you needed $15,000, you’d have to take out close to $24,000, after accounting for those charges, according to Fidelity.

Of course, that cash you pull from the account will also miss out on future market gains. The S&P 500 Index is up more than 20% this year.

“As much as I dislike credit card debt, it’s hard for me to make a case that you should take an early withdrawal from your 401(k),” Rossman said.