Household bills, groceries, and rent are monthly demands that affect many of us. These expenses often keep people wondering how they will afford to save for retirement. In addition, expenses can really add up if you have student loan debt. According to statistics, 8 out of 10 adults with student loans claim that they are struggling to save for retirement.
Is it possible to pay off student loans and create a retirement plan? With Boston Cash Flow Financial, student loan debt can be eliminated while protecting your retirement savings goal. It’s important to note that saving for retirement is essential and should start as early as possible. Learn more below and contact us today.
Student Loan Debt vs. Retirement Savings
Commonly, adults with student loans have smaller retirement savings. According to a survey conducted by MIT AgeLab, every four adults have an average balance of over $37,000 of student loan debt. Monthly payments can also average $390 which is often 20% of a monthly household’s income. These numbers can seem alarming but should not dismiss the importance of saving for retirement.
Paying off debt is just as important as saving for retirement. In fact, financial experts advise that borrowers emphasize on retirement savings along with paying student loans. Oftentimes, adults primarily focus on paying off debt first and then save for retirement. However, it is an uphill battle to save suffiently if you postpone it. Instead, start early.
Why Invest Early
The report by MIT AgeLab indicates that at least 73% of Americans expect to begin or increase their retirement savings after their student loans are paid off. This may sound like a good plan, but it may not be the ideal time to start. In essence, people often complete paying their student debt by their 40s. Therefore, if you wait until this time to start or increase your retirement contribution, you will lose on savings potential.
When you start early, you get more benefits of compound interest. Compounding helps you earn more money over time in both the growth of your investment and your contributions. In other words, you will earn returns on your returns. Starting early also allows you to save a comfortable amount. Whereas, starting later will require you to save larger amounts of money to achieve a decent retirement goal.
While in your 20s, it can be challenging to set aside 10% of your monthly income toward retirement. At the very least, utilize a retirement savings account that your employer can match. Also, there are different retirement avenues one can seek. For this reason, partnering with a financial expert is ideal to create a plan that works for you. You’ll uncover extra dollars that you can use toward your savings. Also, you’ll learn how to eliminate your debt quickly while earning compounded interest.
The most successful financial plans are customized for each individual. Let’s face it, every household has different obligations and challenges. Many of which include high student loan debt with little to no retirement savings. Boston Cash Flow Financial can create a financial plan that eliminates your debt while establishing an obtainable retirement savings plan. Set yourself for financial success with a complimentary consultation today. Call (508) 472-3777 or request an appointment online.