Americans carry $1.5 Trillion in student loan debt. On top of that, the average person has $3,700 in credit card debt.

With so much student loan debt in the country, it’s no surprise young people are trying to find ways to pay them off quickly. One of the most common ways to do that is by tapping into retirement funds.

One in four adults under 34 years old is using 401K funds to pay off student loans and credit card debt, according to a new report from Merrill Lynch and Age Wave. That’s a risky choice.

“There’s a 10 percent penalty for withdrawing retirement money from your account, if you take that money out before you’re aged 59 and a half,” said Ness.

Timothy Ness with Ness Tax and Bookkeeping says when you withdraw from a 401K early you are taxed on the money being taken out as extra income for that year. Even if the intent is to help tackle a financial burden this method can actually create more headaches.

“We’ve had people take out of their retirement accounts for various reasons, including student loan debt. And many folks are prepared to pay the tax on that money that they take out, but many aren’t prepared for that extra 10-percent penalty and haven’t saved up enough or had enough withheld when they did this distribution to take care of the tax due at the end of the year,” said Ness.

Many financial planners say taking retirement out early is not only causing you to lose money from penalties and taxes, it could also be delaying your future retirement plans.

“A former student should contact a financial advisor, could contact a tax professional or accountant. Maybe visit with a member of your family who has experience with this. To get a little bit more information and perspective about what they’re about to do,” said Ness.

Ness says well-known financial advisor, Dave Ramsey, suggests not contributing to a 401K until your debt is paid off, then use that extra money to pay off loans. Once that debt is gone, you should start contributing to retirement funds again.