Saving For Retirement: What About Student Loans?

By Patricia Uceda, Spring 2015 Graduate Research Assistant

 

loansIf you are a college student or recent college grad, it’s likely that you’ve taken out student loans at some point to help fund your education. It’s tempting to think that you have to pay off your student loans first before starting to save for retirement, and it’s what many people end up doing. However, this isn’t the only thing to think about.

While you may think that your student loans will be paid off within the first few years after college, circumstances can change and it may end up taking longer. The last thing you want is to be a decade out of college and still have student loan debt and no retirement savings plan.

While we don’t give investing advice at the Investor Advocacy Clinic, we do recommend that you think about how saving modestly now, while simultaneously paying off your student loans, might be able to help you and your long-term retirement situation. Even saving only a small portion of your monthly paycheck will pay off, especially when you factor in compounding interest.