Your student loans may haunt you even after you’ve paid them off
That’s because they’re having a major impact on how much people save for retirement, according to a focus group and survey of more than 1,800 people released by the MIT AgeLab and financial institution TIAA. Nearly three in four of those with student loan debt said they are putting off maximizing their retirement savings until they repay their debt. And more than one in four who aren’t saving for retirement at all say it’s because of their student loans.
“It’s hard to capture savings if you’re saddled with student loan debt, but it’s essential,” says Jennifer E. Myers, the president of SageVest Wealth Management. “Your student loans might not be paid off for decades. Waiting that long to begin saving for retirement has the potential of making retirement unattainable.”
Always pay at least the minimum on student loans: “You should of course make timely payments on your student loan debt, and as long as you’re making your minimum payments on time, you’re making steady progress, just like with a home mortgage,” says Foss. Adds Betterment senior financial planner Nick Holeman: “Not doing so can lead to penalties, extra interest, and higher finance charges, in addition to ruining your credit score.
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