It is common knowledge that many people can do more to save for their retirement. And much has been written and said concerning paying off the heavy load of student loan debt many people carry. These may seem to be mutually exclusive goals and functions, but Beth Braverman argues in Forbes that they are not.
In “Yes, You Can Save for Retirement and Pay Your Student Loans,” Braverman argues that while it is easy to use paying off student loans as a rationalization for not setting money aside for retirement, that is a mistake. Her treatment of the matter is useful food for thought for those who offer, administer and serve retirement plans since it illustrates the needs and challenges participants face.
“Student loans or not, delaying retirement savings is one of the biggest personal finance mistakes you can make,” says Braverman. She argues that one can pay off student loans and save for retirement simultaneously. Following are some tips she offers for doing just that.
Start with the minimums. You must make minimum payments on student loans. If that is not possible, it may be helpful to find ways to reduce expenses and to find out about government programs that may be of assistance. Also, treat as a minimum figure to put into retirement savings the amount necessary to qualify for an employer match.
Fund an emergency savings account. Once one is making minimum payments, if possible consider establishing and contributing to an emergency savings account.
Increase payments strategically. Once one is making minimum payments and has established an emergency account, one can consider finding ways to set aside additional funds.
In “Yes, You Can Save for Retirement and Pay Your Student Loans,” Braverman argues that while it is easy to use paying off student loans as a rationalization for not setting money aside for retirement, that is a mistake. Her treatment of the matter is useful food for thought for those who offer, administer and serve retirement plans since it illustrates the needs and challenges participants face.
“Student loans or not, delaying retirement savings is one of the biggest personal finance mistakes you can make,” says Braverman. She argues that one can pay off student loans and save for retirement simultaneously. Following are some tips she offers for doing just that.
Start with the minimums. You must make minimum payments on student loans. If that is not possible, it may be helpful to find ways to reduce expenses and to find out about government programs that may be of assistance. Also, treat as a minimum figure to put into retirement savings the amount necessary to qualify for an employer match.
Fund an emergency savings account. Once one is making minimum payments, if possible consider establishing and contributing to an emergency savings account.
Increase payments strategically. Once one is making minimum payments and has established an emergency account, one can consider finding ways to set aside additional funds.
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