With the amount of student debt mushrooming over the last few years, and the decline of money that’s being put towards retirement, it’s hard not to see how the two have a correlation. These days, it’s not uncommon for college graduates to owe $50,000, $100,000 or even $150,000 in student loans after graduation. Unfortunately, it’s commonplace given the climbing costs of tuition and students taking more than four years to complete their education.
The biggest issue is the timing; experts agree that the earlier that someone can start saving around 15% of their income for retirement, the better their chances are at retiring on time. Starting to save at 25 is ideal, but for most Americans, it’s definitely not realistic since (if we’re going on an “average” timeline) most graduate college at 22-24, and are immediately handed their first bill as an adult in the real world.
In choosing between the surmounting debt that a 24 year old has, or retirement in 40 years, most are going to make their student debt a priority. I don’t think many could take issue with the prioritization, but rather the student loan debt that young people are saddled with so year on in life.
There are lesser known effects of this monstrous debt that have yet to garner as much attention, and that’s all the other priorities that are being pushed aside such as putting off marriage, buying a house, or just buying the necessities. Some carry this burden through their lives, well past retirement, which is an issue all on it’s own.
Is there a solution to these issues? Not really. As experts see it, the student loan crisis will soon morph into a bigger retirement issue as soon as millennials start to retire.