What Adults Managing Student Loans Should Know About Planning for Retirement

Balancing student loan payments with saving for retirement is a financial challenge many adults face in the United States. More than 43 million people carry student loan debt, and a significant number continue paying those loans well into midlife or even as they approach retirement. With so much income tied up in repayment, it’s common for retirement planning to fall behind.

At the same time, research shows that many Americans feel unprepared for retirement—especially mid-career earners and high‑net‑worth (HNW) individuals who are juggling multiple financial goals. Financial Aid Awareness Month in February offers a helpful reminder to step back and reassess how student loan management and retirement savings can work together rather than compete.

Whether you’re repaying your own loans, handling Parent PLUS debt, or supporting a child through school, understanding how these goals intersect can help you make progress on both fronts.

Take Advantage of Employer Benefits Through the SECURE 2.0 Act

A major development for borrowers is the student loan employer match introduced under the SECURE 2.0 Act. If your workplace offers this benefit, each qualifying student loan payment you make can earn a matching contribution toward your 401(k) or similar retirement plan—even if you aren’t actively contributing to the account yourself.

This feature is valuable because it lets you build retirement savings without diverting money from loan repayment. It also helps you tap into the benefits of compound growth while still chipping away at your debt. For early‑ and mid‑career professionals, this is especially useful for maintaining long‑term savings momentum without sacrificing progress on loans.

To find out if you’re eligible, reach out to your HR department or retirement plan administrator and ask how to get started.

Be Strategic with Extra Loan Payments

Paying extra toward your student loans can accelerate your payoff timeline, but it’s most effective when applied correctly. Many loan servicers automatically use additional payments to cover upcoming installments rather than reducing your principal balance—the actual amount you borrowed.

While that might make you appear ahead on your payment schedule, it doesn’t cut down the interest that accumulates over time. To make real progress, you need to request in writing that any extra payments go directly toward your principal. This simple step can shorten your repayment term and significantly lower your total interest costs.

If you’re unsure how your servicer is applying your payments, give them a call for clarification and keep documentation of your request.

Use Retirement Contributions to Reduce Income‑Driven Repayment Amounts

If you’re enrolled in an income-driven repayment (IDR) plan, contributing to a pre‑tax retirement account—such as a traditional 401(k), 403(b), or SIMPLE IRA—can lower your monthly payment. That’s because IDR calculations are based on your adjusted gross income (AGI), and pre‑tax contributions reduce your AGI.

This creates a two‑fold benefit. You’re growing tax‑deferred retirement savings while also decreasing your current loan payment. For HNW households, registered investment advisors (RIAs), wealth and retirement (W&R) professionals, and borrowers pursuing Public Service Loan Forgiveness (PSLF), lowering AGI can result not only in more manageable payments but also potentially larger amounts forgiven.

Incorporate Long‑Term Forgiveness Into Your Financial Strategy

If you're eligible for loan forgiveness programs that span 10 to 25 years, it’s worth evaluating whether aggressive repayment is truly the best financial move. While paying off loans quickly can feel productive, it may reduce the benefits of long‑term forgiveness and limit your ability to contribute meaningfully to retirement savings.

By prioritizing retirement contributions—especially pre‑tax ones—you may reduce your AGI, lower your monthly payment, and potentially increase the amount forgiven. Meanwhile, your retirement savings continue compounding, strengthening your long‑term financial outlook.

Taking time to assess your broader financial picture can help you identify strategies that optimize both debt repayment and future security.

Thoughtful Planning Can Support Both Goals

Repaying loans and saving for retirement don’t have to be competing priorities. With the right approach, you can make consistent progress in both areas. This may include confirming whether your employer offers student loan retirement matching, ensuring extra loan payments are going toward your principal, increasing pre‑tax contributions if you’re on an IDR plan, or exploring your eligibility for forgiveness programs.

Working with a financial professional can be especially beneficial if you have multiple goals, complex income sources, or HNW considerations. A knowledgeable advisor can help you evaluate each strategy’s tax impact and long‑term value.

The Bottom Line: Balance Is Achievable

The belief that you must choose between paying down student loans and saving for retirement is widespread—but it’s not accurate. With the growing availability of tools like SECURE 2.0 employer matching, IDR plans, and loan forgiveness programs, you can build a strategy that supports both objectives.

Financial Aid Awareness Month serves as a reminder that improving your financial literacy is important at every stage of life. If you're working to manage student loan debt while preparing for retirement, this is a perfect moment to reassess your numbers, refine your plan, and look ahead with clarity.

If you’d like help reviewing your options or mapping out your next steps, reach out today. A customized plan can help you lighten your debt load, strengthen your retirement savings, and move forward with confidence.