What Adults Managing Student Loans Should Know About Planning for Retirement

For many adults in the United States, student loan debt and retirement savings sit at the top of their financial worry list. With more than 43 million people carrying education-related debt—and many still paying those balances well into midlife—it’s easy to see why retirement planning often ends up on the back burner.

At the same time, a growing number of Americans feel unprepared for retirement, particularly high‑net‑worth (HNW) professionals and mid‑career earners juggling several financial goals at once. With Financial Aid Awareness Month taking place this February, it’s an ideal moment to step back and think about how these priorities can work together rather than compete.

Whether you’re handling Parent PLUS loans, managing your own student debt, or supporting a child through college, here’s how you can keep retirement planning moving forward while still making progress on your loans.

Take Advantage of Employer Benefits Through the SECURE 2.0 Act

One of the most impactful changes for borrowers comes from the SECURE 2.0 Act, which allows employers to match your student loan payments with contributions to your retirement plan. If your company offers this feature, each qualifying loan payment you make could trigger a matching deposit into your 401(k) or another eligible retirement account—even if you’re not currently contributing yourself.

This benefit matters because it lets you grow retirement savings without pulling money away from your loan repayment efforts. You also get the advantage of early compounding growth in your retirement plan, something many borrowers miss when they prioritize debt payoff over saving.

To find out whether this option is available to you, reach out to your HR department or retirement plan administrator and ask how to enroll.

Be Intentional When Making Extra Loan Payments

If you’re comfortable adding extra money to your student loan payments in hopes of shortening the repayment timeline, make sure those extra dollars are put to work effectively. Many loan servicers default to applying additional money to upcoming payments instead of reducing your principal balance.

While being “ahead” on payments may feel good, it does little to curb the amount of interest you’ll pay over the life of the loan. To make the most of your efforts, submit a written request asking your servicer to apply any additional payments directly to the principal.

This small action can lead to meaningful savings and a faster path to debt freedom. If you’re unsure how your payments are currently applied, contact your servicer for clarification and keep a written record of your request.

Use Retirement Contributions to Lower Your Monthly Loan Payments

Borrowers enrolled in income‑driven repayment (IDR) plans can benefit from contributing to pre‑tax retirement accounts such as a traditional 401(k), 403(b), or SIMPLE IRA. Because IDR plans calculate your payment based on your adjusted gross income (AGI), lowering your AGI through retirement contributions results in smaller monthly payments.

This strategy offers two advantages at once: you’re building tax‑deferred savings for your future while also easing your current loan payment burden. For borrowers working toward Public Service Loan Forgiveness (PSLF) or other long‑term forgiveness programs, reducing your AGI can also increase the total amount eventually forgiven.

This approach can be especially useful for registered investment advisors (RIAs), wealth and retirement (W&R) advisors, and HNW individuals navigating complex financial responsibilities.

Consider Long‑Term Forgiveness When Mapping Out Your Strategy

For borrowers eligible for forgiveness programs that span 10 to 25 years, it’s important to evaluate whether aggressive repayment truly helps you reach your broader financial goals. While paying loans off quickly may feel satisfying, doing so could reduce the amount eligible for forgiveness and limit how much you can save for retirement in the meantime.

If you qualify for a long‑term forgiveness pathway, contributing more to your retirement accounts may offer better overall financial results. Lower contributions to your AGI mean smaller monthly payments, more potential forgiveness, and increased retirement savings thanks to tax‑deferred growth.

Taking time to review your full financial situation can help you identify where strategic adjustments might benefit both your loan repayment plan and your retirement outlook.

Practical Steps Can Help You Stay on Track With Both Goals

Managing student loans and saving for retirement doesn’t have to be a one‑or‑the‑other choice. By using strategies tailored to your income, tax considerations, and long‑term plans, you can move forward on both fronts at the same time.

Some practical steps to consider include:

Confirming whether your employer offers student loan‑based retirement matching under the SECURE 2.0 Act.
Ensuring that any extra loan payments are applied directly to the principal, not future installments.
Increasing contributions to pre‑tax retirement accounts if you’re enrolled in an IDR plan.
Reviewing your eligibility for federal forgiveness programs to determine the best long‑term approach.

For individuals with multiple financial priorities or more complex income situations, partnering with a financial advisor can make the process easier. A professional can help you evaluate tax implications, run projections, and build a clear plan that fits your personal goals.

The Bottom Line: You Can Balance Both

It’s a common misconception that you must choose between paying down student loans and preparing for retirement. With thoughtful planning and the right tools—such as the SECURE 2.0 Act provisions, income‑driven repayment options, and federal forgiveness programs—you can make meaningful progress on both.

Financial Aid Awareness Month serves as a useful reminder that financial education matters at every age and stage. If you’re navigating student loan repayment while trying to build a secure future, now is an ideal time to review your plans and make sure you’re on the right track.

If you’d like support reviewing your options or creating a personalized plan, reach out today. With a clear strategy, you can reduce your loan burden, strengthen your retirement outlook, and feel more confident about the years ahead.