One of the essential tasks of a financial advisor is to help prepare an adult for their individual path to retirement.

The most important part of this preparation is creating a budget that will enable them to enjoy the fruits of their retirement, while staying within the boundaries of their regular income (pensions, Social Security) and investment income (non-qualified assets and IRA distributions).

Debt is a key component to take into account in successful retirement planning. One of the most common financial mistakes that retirees make is racking up too much credit card debt. When we review expenses for retirement, the first item we focus on is a person's debt; in particular, their credit card debt.

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We analyze what is being purchased with credit cards. Are they necessary items or discretionary items?

3 Sure-fire Ways to Avoid Credit Card Debt

  1. Pay your credit card balance in full every month. Credit cards should be considered a convenience. You should never have to incur high interest charges for carrying an unnecessary credit card balance. Aim to have your credit card usage reflect the amount of money that you already have in your budget and your checking account.
  2. Do not use your savings ("nest egg") to pay off your monthly balance. Your savings represents a valuable source of funding for your future goals; it should not be used for paying down excessive living expenses.Keep track of the expenses incurred on your credit card.You do not want to be forced to liquidate any assets at an inopportune time to pay off this debt.
  3. Don't forget about debit cards. If you really need the convenience of charging a purchase to a credit card, one way to control your expenses is to use a debit card instead. Each month, set aside a certain amount of money to put on your debit card. Because with a debit card, you can't spend what you don't have, this strategy helps keep your debt "in check."

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  1. The interest rate being charged by the credit card company: This is an especially key point for those individuals who carry a balance every month. High interest rates can really put a pinch on your monthly budget, particularly if you will be living on a fixed income.
  2. Late fee charges: Oftentimes, paying your credit card bill late can raise your annual percentage rate (APR)—the interest rate that the credit card company tacks on to your credit card balance. Make sure you know how much you will be penalized if you don't pay in a timely fashion.
  3. Foreign transaction fees: If you plan on traveling oversees, foreign transaction fees can increase the cost of the items you purchase, over and above the difference in exchange rate in the country you're visiting.
  4. Annual fees: Larger banks (for example Chase Freedom, Bank Americard Cash Rewards, Capital One Cash Rewards and Citi Simplicity Card) usually offer credit cards with no annual fees.
  5. Rewards options: American Express or Discover typically tack on rewards options to their credit card offerings. With American Express, you can choose to receive points that can be used towards travel (to see the grandkids!) Discover has a five percent cash back feature that changes each quarter for different purchase categories. For example, you may get cash back on gas purchases made in July and cash back on restaurant purchases made in January.
  6. Compare credit card features online: Some useful websites for comparing credit card features are: www.CreditCards.Com, and
  7. Be wary of gimmicks: Credit card companies may offer uncharacteristically low fees initially, as an incentive to get you to apply. However, these starter rates usually disappear within a certain time frame and you can be hit with larger fees, penalties and interest rates.

There are many money-saving myths out there, but the most important thing to remember is that you have control over how much money you spend.

It may help to prepare an expense sheet every year that includes income from your pension, social security and qualified distribution income.This small exercise can help you live within your income and budget and "keep you on track!"