Retirement Planning Tips for Adults Managing Student Loan Debt

Student loan obligations and retirement savings often compete for attention, especially for adults who find themselves juggling both long after graduation. With more than 43 million Americans carrying student loan balances—many well into midlife—it’s understandable that long-term planning can feel delayed or even out of reach.

At the same time, countless individuals, including high-net-worth earners and mid-career professionals, report feeling unprepared for retirement. As Financial Aid Awareness Month arrives this February, it’s a timely reminder to take a closer look at how these financial goals can work together rather than against each other.

Whether you're paying down Parent PLUS loans, managing your own education debt, or assisting a child through school, here are key insights to help you build retirement savings while staying on track with loan repayment.

Make the Most of Employer Benefits Under the SECURE 2.0 Act

One of the most meaningful updates for borrowers is the student loan payment match introduced through the SECURE 2.0 Act. If your employer offers this feature, each qualifying student loan payment you make can trigger a corresponding contribution to your workplace retirement plan—such as a 401(k)—even if you’re not currently contributing to the account.

This benefit matters because it allows you to continue reducing your loan balance without sacrificing retirement growth. You can build savings and benefit from compound interest while staying focused on debt reduction. The feature is particularly valuable for early- and mid-career earners who want to stay consistent with retirement planning while accelerating debt payoff.

To get started, reach out to your HR department or plan administrator and ask whether this match is available and what steps you need to take to opt in.

Apply Extra Loan Payments the Right Way

Adding extra payments toward your loans is often a smart way to pay them off faster, but the impact depends on how those payments are applied. Many loan servicers automatically direct additional funds toward future scheduled payments instead of decreasing the principal balance.

Although appearing ahead on payments might look helpful, it doesn’t cut down the long-term interest you’ll owe. To genuinely speed up repayment, you must request—preferably in writing—that your extra payments be applied directly to your principal.

This simple adjustment can shorten the overall loan term and reduce the total interest paid. If you aren’t sure how payments are being processed, call your servicer for clarification and keep documentation of your request.

Lower Student Loan Payments Through Pre-Tax Retirement Contributions

Borrowers enrolled in an income-driven repayment (IDR) plan may be able to reduce monthly loan payments by contributing to a pre-tax retirement account such as a traditional 401(k), 403(b), or SIMPLE IRA. Because IDR payments are calculated using your adjusted gross income (AGI), lowering your AGI through retirement contributions results in a lower required payment.

This approach creates a powerful dual benefit: you save for retirement in a tax-deferred account and reduce your immediate loan obligation. For those pursuing programs like Public Service Loan Forgiveness (PSLF), decreasing your AGI can also increase the amount forgiven in the long run.

For individuals such as RIAs, wealth advisors, and high-net-worth clients managing multiple financial priorities, this strategy can help create a more efficient balance between debt management and long-term savings.

Consider Long-Term Forgiveness in Your Planning

If you’re pursuing a loan forgiveness path with a term ranging from 10 to 25 years, it’s worth evaluating whether paying down debt aggressively is the best use of your resources. While it may feel satisfying to eliminate balances quickly, doing so could minimize the total forgiven later and limit the funds available for retirement contributions.

For those eligible for forgiveness, directing more money toward retirement accounts instead may reduce your AGI, lower monthly payments, and ultimately increase the forgiven amount. Meanwhile, your retirement savings continue to grow tax-deferred, supporting stronger long-term stability.

Stepping back to consider your full financial picture can reveal whether forgiveness, rather than rapid repayment, is the more beneficial strategy.

Practical Strategies to Move Forward

Managing student loan payments and building retirement savings doesn’t have to be a conflicting set of choices. With the right plan, you can make meaningful progress on both. Practical steps may include verifying employer 401(k) matches for loan payments, ensuring extra payments go to principal, increasing contributions to pre-tax retirement accounts if you’re on an IDR plan, or reviewing your eligibility for forgiveness programs.

For those with complex financial circumstances, multiple income sources, or high-net-worth considerations, working with a financial advisor can offer valuable guidance. An advisor can help analyze your options, outline tax implications, and identify the most efficient path forward.

The Bottom Line: You Don’t Have to Choose

There’s a widespread misconception that you must prioritize either student loan repayment or retirement savings. Fortunately, that’s no longer the case. With tools like the SECURE 2.0 Act, IDR plans, and forgiveness options, it’s possible to make progress on both fronts.

Financial Aid Awareness Month is a reminder that financial clarity and education matter at every age—not just during school. If you're managing student loan debt while preparing for retirement, this is an ideal moment to pause and reassess your plan.

If you’d benefit from a closer look at your numbers or guidance on setting next steps, reach out for support. A tailored financial strategy can help lighten your loan load, boost your retirement readiness, and provide greater confidence about the future.