For many adults in the United States, student loan debt and retirement savings represent two major financial pressures that often compete for attention. More than 43 million borrowers still carry student loan balances, and countless individuals continue paying down this debt well into their 40s, 50s, and even 60s. With so many households juggling monthly loan payments, saving for retirement can easily fall to the bottom of the priority list.

At the same time, research consistently shows that many Americans feel unprepared for retirement—especially high‑net‑worth professionals and mid‑career earners who often manage overlapping financial goals. With Financial Aid Awareness Month taking place this February, it’s an ideal moment to consider how you can work toward retirement readiness while managing ongoing loan obligations.

Whether you’re tackling your own student debt, paying back Parent PLUS loans, or supporting a child through college, the following strategies can help you move forward on both fronts.

Make the Most of Employer Benefits Through the SECURE 2.0 Act

One of the most significant recent changes for borrowers comes from the SECURE 2.0 Act, which allows employers to match student loan payments with contributions to an employee’s retirement plan. If your workplace offers this benefit, each qualifying loan payment you make can trigger a matching deposit into your 401(k) or similar account—even if you're not contributing personally to that account.

This is a powerful advantage. It gives you the ability to grow your retirement savings without shifting dollars away from debt repayment. You also gain the benefit of tax‑deferred compound growth at a time when every contribution matters. This provision is especially valuable for early‑ and mid‑career professionals who want to prioritize debt reduction while still building long‑term financial security.

To learn whether you’re eligible, connect with your HR department or retirement plan provider and ask about enrollment requirements.

Use Extra Loan Payments Effectively

Choosing to pay more than your minimum required payment can shorten your repayment timeline and cut down on interest—if your servicer applies the funds correctly. Unfortunately, many servicers automatically allocate excess payments toward upcoming monthly installments instead of reducing your principal balance.

While this might make it appear as though you're getting ahead, it doesn’t actually lower the amount you owe or reduce future interest. To accelerate repayment, you’ll need to specify in writing that any extra payment be directed toward the loan’s principal. This simple but important step ensures that you’re truly lowering your long‑term cost.

If you’re unsure how your payments are being applied, contact your loan servicer for confirmation and keep documentation of your request.

Lower Your Student Loan Payments by Contributing to Retirement

If you’re enrolled in an income‑driven repayment (IDR) plan, contributing to a pre‑tax retirement account such as a traditional 401(k), 403(b), or SIMPLE IRA can reduce your monthly loan obligation. IDR plans calculate payments using your adjusted gross income (AGI), so lowering your AGI through retirement contributions results in a smaller required payment.

This approach offers a two‑fold benefit: you’re saving for retirement while also decreasing your current student loan burden. For those pursuing Public Service Loan Forgiveness (PSLF) or another long‑term forgiveness pathway, a lower AGI could mean a higher amount ultimately forgiven. For RIAs, wealth advisors, and HNW individuals managing complex financial decisions, this strategy can play a meaningful role in optimizing long‑term outcomes.

Account for Long‑Term Forgiveness in Your Overall Strategy

Borrowers with forgiveness options—typically spanning 10 to 25 years—should carefully consider whether paying off loans aggressively is the most effective strategy. While it may feel satisfying to eliminate debt quickly, doing so might reduce the benefits of available forgiveness programs and leave fewer resources for retirement savings.

If forgiveness is in your future, increasing contributions to your retirement plan can reduce your AGI, lower your IDR payments, and potentially increase the amount forgiven over time. Meanwhile, those boosted retirement contributions can continue compounding, helping you stay on track for long‑term financial stability.

Stepping back to review your complete financial picture can clarify where your dollars will have the greatest impact.

Smart Planning Helps You Advance Both Goals

Paying down student loans and saving for retirement doesn’t have to be an either/or decision. By selecting strategies that reflect your goals, income, and tax considerations, you can make meaningful progress on both. This may involve checking whether your employer participates in SECURE 2.0 matching, verifying how extra loan payments are applied, increasing pre‑tax retirement contributions under an IDR plan, or evaluating your eligibility for forgiveness programs.

For individuals with layered financial obligations, variable income, or high‑net‑worth considerations, a financial advisor can provide valuable guidance. An expert can help model various scenarios, weigh tax implications, and build a long‑term plan that supports both debt repayment and retirement growth.

The Bottom Line: You Can Balance Debt and Retirement

It’s a common misconception that you must choose between tackling student loan debt and saving for retirement. With thoughtful planning—and with tools such as SECURE 2.0 matching, income‑driven repayment, and forgiveness programs—you can move forward on both paths.

Financial Aid Awareness Month is a helpful reminder that financial literacy matters long after college. If you're navigating student loan repayment while working toward a comfortable retirement, this is a perfect time to reassess your approach and create a strategy that supports your long‑term goals.

If you’d like help reviewing your options or mapping out next steps, reach out today. A personalized approach can help you reduce your loan burden, build retirement momentum, and move forward with confidence.