I'm a real debt hawk, but funding retirement needs to be a higher priority than student loan repayment.
Although debt repayment is essential, you can do it over time. But repaying a loan isn't an investment.
It's not that Americans wouldn't want employers to help them with loan repayment issues.
Some 80 percent of those surveyed by iontuition said that they would like a company benefit that helps them manage student loans.
Sure, loan management can be difficult, especially if your salary isn't enough to cover repayments.
But there's a lot you can do. You can save for retirement and pay back your loans. Here are some strategies:
1) Get into an automatic retirement savings plan.
These "auto-pilot" plans automatically deduct money for your 401(k). You can do it yourself if your company doesn't offer one through a mutual fund firm
Automatic savings don't involve you making a decision, so they are ideal for reluctant savers.
At the very least, find a target-date retirement fund within your retirement program that selects mutual funds for you.
Save first, pay your loans off second.
2) Know how compound interest works in your favor.
Let's say you're 25, have $10,000 in your retirement kitty and can manage to salt away 8% of your salary every year and get a 2% annual raise.
At age 67, assuming a 7% annual return, you'd have $1.2 million, according to the bankrate.com retirement calculator.
But if you knocked down your annual contribution to 4% to pay off loans?
You'd have slightly more than $700,000 at the same age. You left about a half million dollars on the table.
Compound interest is powerful and works consistently well over time. But money you're not saving now won't magically reappear decades from now.
3) Find a balanced approach
This strategy is simple. Fund as much retirement savings as you can while paying down loan principal.
If you have federal student loans, you can consolidate, often lower your finance charges and get a payment you can afford.
For information on federal repayment plans, go here.
Use the government's repayment estimator to see what plan works best for you. The idea is to pay as much as you can without sacrificing retirement and cash savings for emergencies.
What if you have private loans?
You can refinance them through services like SoFi and StudentLoanHero.
Just keep in mind that the longer you pay off a loan, the more total interest you'll pay, so keep an eye on total costs.
