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How you manage debt could have a big impact on how your retirement dreams play out. Four in 10 retirees cite "paying off debt" as a current financial priority — putting it on equal footing with "just getting by to cover basic living expenses" as a top concern, according to a new report from the Transamerica Center for Retirement Studies. Almost 3 in 10 cite paying down credit card debt as a priority, while 17 percent are focusing on mortgage debt and 11 percent some other consumer debt, such as medical bills or student loans. Meanwhile, many younger Americans aren't optimistic about their chances of knocking out debt before they retire, either — or, well, ever. A new survey from CreditCards.com found that 25 percent of adults expect to die with debt. (That's down from 30 percent who said so last year.) Another 41 percent of adults say they don't know when they'll pay off their debt.

While many retirees say they are happy in retirement and have kept up their standard of living, those outstanding debts — in combination with other red flags, such as reliance on Social Security as a main source of income and a lack of long-term care planning — point to the potential for problems, said Catherine Collinson, chief executive and president of the Transamerica Institute and TCRS. "Many are in a precarious situation if they are confronted with any kind of financial shock," she said. TCRS surveyed 2,043 retirees in July, focusing on adults age 50 or older who consider themselves either fully or semiretired. The median age of those retirees was 71. Among those retirees in the red, the median owed is $52,000 in mortgage debt and $4,000 in non-mortgage debt.

Earlier-than-expected exits from the workforce may contribute to the share of retirees with debt. TCRS found that 56 percent of retirees left the workforce sooner than expected — for reasons including a job loss, their own poor health or to become a caregiver for an ill loved one. The circumstances behind an unexpectedly early exit can generate additional debts, nixing any plans workers may have had in order to knock out existing debt before retirement, Collinson said. "They may have found it really difficult to regain their financial footing," she said. Here are four ways you can manage debt ahead of and into retirement.

Prioritize repayment

"I tell my clients that before you retire, we should try to retire as much debt as possible," said certified financial planner Marguerita Cheng, chief executive officer for Blue Ocean Global Wealth in Gaithersburg, Maryland. Credit card debt should be a top priority, due to the high rates and revolving balance, she said. Then look to debts with fixed rates and payments, such as a mortgage or auto loan. Those are more predictable (and therefore easier to plan for as part of a retirement budget), but can still be worth chipping away at so you have one less expense in retirement.

Work debt into your retirement plan

If it looks like you'll retire with some debt, factor that repayment into your overall plan, said CFP Lynn Ballou, regional director of EP Wealth Advisors in Lafayette, California. "Make sure the payoff of those debts is built into the budget — not as an additional cost, but because you are giving something up," she said. Your retirement plan should also include a cash "thinking fund" to save for anticipated big-ticket purchases or expenses in retirement, Ballou said. That way, you don't have to pull extra out of a retirement account (triggering tax surprises) or take on substantial new debt. "People forget if they retire at 65, they'll probably buy a car or two and replace their roof at least once," she said.

Limit new, late-career debt

Keep the potential for an earlier-than-expected exit in mind once you hit your 50s. Be cautious at that point about taking on new debt if you can avoid it, especially where an affordable repayment plan hinges on you continuing to work, Chen said. "You could experience a reduction in income sooner than you anticipate," she said. Particularly dicey: A late-career 401(k) loan to cover credit card debt or other expenses. That loan becomes due should you leave your job, turning an unexpected workforce exit into a double whammy of reduced retirement savings and a taxable distribution, Chen warned.

Most common reasons for taking a loan from 401(k) account 31% Pay down/pay off high interest credit card debt 24% Home improvements or repairs 21% Buy a home or refinance a mortgage 19 percent Pay outstanding bills

Make debts more manageable