The article “This is How Much Student Loan Debt Will Cost You in Retirement” explains that for every dollar of student debt one has, 35 cents are taken from each dollar of retirement money saved. Paying off loans early actually does not help with this. The best approach is to pay the student debt on time each month until it is paid off. The reasoning is that a dollar saved in a retirement plan is more valuable because 1) the funds could be matched by an employer contribution 2) the compounding interest accrued from saving will equal more than what is saved by paying down student debt early.
This is the approach I am taking as a 20-something ex-student with debt, and it’s comforting to know that this is the right path to take. I recommend this as a read for anyone who wants to manage their student loans responsibly.
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This is how much student debt will cost you in retirement
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