Retirement Planning Tips for Adults Managing Student Loans

Many adults in the United States are juggling two major financial responsibilities: paying off student loans and preparing for life after they stop working. With millions still carrying education-related debt well into later adulthood, it’s easy for retirement planning to fall behind. At the same time, surveys continue to show that people of all income levels feel unprepared for their future savings needs. This is especially true for high‑net‑worth professionals and mid‑career earners balancing multiple financial demands.

In recognition of Financial Aid Awareness Month this February, it’s an ideal moment to examine how these priorities can work together. Whether you're repaying your own loans, have Parent PLUS loans, or are assisting a child with their educational expenses, there are ways to make progress on retirement goals without neglecting your debt.

Using Employer Benefits Through the SECURE 2.0 Act

A key opportunity introduced by the SECURE 2.0 Act allows employers to match student loan payments with contributions to workplace retirement plans. If your company provides this benefit, each qualifying loan payment can trigger a matching contribution to your 401(k) or similar plan—even if you're not making your own contributions at the same time.

This structure makes it possible to build retirement savings while staying focused on lowering your student loan balance. Because those employer contributions can compound over time, it becomes easier to grow long‑term savings without stretching your budget. This can be particularly valuable for early‑ or mid‑career individuals who want to retire comfortably but also want to prioritize paying down debt.

To determine whether this benefit is available to you, reach out to your HR team or retirement plan administrator and ask how to get started.

How to Make Extra Loan Payments Work in Your Favor

Adding extra money toward your student loans can accelerate payoff—but only if those additional payments are handled correctly. Many loan servicers automatically apply extra funds toward future scheduled payments rather than reducing the principal amount.

While that might make your next payment smaller, it doesn’t reduce the underlying balance or help cut the amount of interest that accrues. To genuinely speed up the repayment process, you must request in writing that any additional funds go directly toward your principal.

This small but important step can shorten your repayment timeline and reduce total interest costs. If you're unsure how your extra payments are being applied, call your servicer, ask for clarification, and keep documentation of your request.

Using Retirement Contributions to Lower IDR Payments

Individuals enrolled in income‑driven repayment (IDR) plans may benefit from contributing to pre‑tax retirement plans like a traditional 401(k), 403(b), or SIMPLE IRA. Because IDR payments are based on adjusted gross income (AGI), lowering your AGI through retirement contributions can lead to reduced monthly student loan payments.

This creates a dual advantage: you’re putting away tax‑deferred retirement savings while also reducing your current loan obligation. For professionals working toward Public Service Loan Forgiveness (PSLF) or other long‑term forgiveness options, lowering AGI can also increase the amount that may eventually be forgiven.

This approach can be especially helpful for registered investment agents, wealth and retirement advisors, and high‑income earners who are coordinating multiple financial priorities at once.

Long-Term Forgiveness Should Be Part of the Equation

Many borrowers qualify for forgiveness programs that span 10 to 25 years. When evaluating your repayment strategy, it’s important to consider whether aggressively paying off your loans is truly the most advantageous use of your income.

While fast repayment may feel rewarding, it could limit the benefits available through forgiveness programs and reduce the funds you might otherwise allocate toward retirement. For those eligible for forgiveness, increasing contributions to retirement accounts may help reduce AGI, decrease monthly loan payments, and increase the final forgiven amount.

At the same time, retirement contributions continue to grow tax‑deferred, helping you stay on track for long‑term financial stability. Taking a holistic view of your finances can reveal opportunities to balance debt repayment with future planning.

Practical Strategies to Advance Both Goals

You don’t have to choose between paying off student loans and saving for retirement. With thoughtful planning, both objectives can move forward. Consider the following steps:

  • Confirm whether your employer offers the new SECURE 2.0 student loan matching benefit and enroll if eligible.
  • Verify that any extra loan payments are applied to your principal balance, not future payments.
  • Increase pre‑tax retirement contributions if you're using an IDR plan and want to lower monthly payments.
  • Review potential eligibility for forgiveness programs and determine how they might influence your long‑term plan.

For those with complex income structures, high‑net‑worth considerations, or multiple competing goals, consulting with a financial advisor can be extremely helpful. An advisor can analyze your tax situation, model repayment scenarios, and help you understand how different strategies affect your long‑term outlook.

Finding the Right Balance

It’s a common misconception that paying off student loans and saving for retirement are mutually exclusive choices. With today’s planning tools—from SECURE 2.0 benefits to income‑driven repayment options and forgiveness programs—you can successfully pursue both.

This Financial Aid Awareness Month offers a chance to revisit your financial goals, reassess your strategy, and ensure you’re taking steps that support your long‑term security. Whether you're reevaluating your repayment plan or looking to strengthen your retirement savings, thoughtful planning can help you reduce debt, build wealth, and approach the future with greater confidence.

If you’d like help reviewing your numbers or exploring the best path forward, consider reaching out for guidance. A customized plan can help you stay on track and make meaningful progress toward both your retirement and student loan goals.