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Why Millennials Are Saving Less for Retirement


According to a recent study, young career-goers who enter the workforce without student debt are better set for retirement than their indebted counterparts. Specifically, millennials with $30,000 in student loan debt are more likely to enter retirement with significantly less savings than other graduates their age.

In fact, students who graduate with debt could end up retiring with as much as $325,000 less in their bank accounts than other retirees.

The study also revealed that, in 1990, the average student loan debt amounted to about $10,000. Today, the average debt is $33,000. “We knew that it was obviously going to be less money [in retirement],” a research analyst told CNBC regarding the study, “but the compounding really makes it a large difference for the 22-year-old.”

Student Debt Influences Other Financial Decisions, Too

In addition to limiting retirement savings, student loans influence important financial decisions like buying a house and investing.

Paying a student loan every month is a financial burden that limits the expendable monthly income of young households across the nation; additionally, it keeps them from saving for the future. Although students can delay paying back their loans, temporary solutions don’t address the larger issue.

More Retirement-Age Adults Have Education Debt

Education debt affects more than young college graduates. In fact, studies show that in 1989, only 4% of retirement-age adults (those between the ages of 55 and 64) had leftover debt from student loans. Today, roughly 30% of retirement-age adults have debts from school.

Individuals who enter the workforce without student loans are 60% more likely to max out their employers’ match for retirement plans. Those who start working and still have debt are less likely to maximize their employer benefits for retirement.

What to Do if You Can’t Payback Your Student Debt

If you’re facing overwhelming debt, such as student loans, speak with a Los Angeles debt relief attorney from our law firm today. We offer skilled guidance for those facing serious debt, including bankruptcy and alternatives to bankruptcy.

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