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Nate Obringer, CFP®, RICP®
Financial Planner
Prudential Advisors
9800B McKnight Road, Suite 223
Pittsburgh, PA 15237
Phone: 412-318-4129
Fax: 877-840-2322
Email: nate.obringer@prudential.com
July/August 2018
College Debt vs. Retirement Savings
Much has been made of Millennials’ increasing college debt load. Complicating matters, rents are often high, while wages are generally lower when starting out in the work world. In this environment, paying off college debt and saving for retirement becomes a seemingly impossible puzzle to solve.
Difficult, however, doesn’t mean it is impossible. If you’re putting off saving for retirement because you want to pay off low-interest student loans first, think again. A little saved at a young age may potentially turn into a lot when the time comes for retirement.
Costly College
True, college is proving more costly. The Federal Reserve Bank of New York reported that total student loan debt after the third quarter of 2017 was $1.36 trillion. About four in 10 Millennials between 18 and 29 years old have student loan debt, according to the Institute of Politics at Harvard Kennedy School (IOP).Time Matters
Still, contributing even a small amount toward retirement — perhaps in a company 401(k) plan or IRA — may potentially offer big benefits down the road. That’s because time really matters when it comes to growing your money.Test the following statement: When contributing the same total, putting away a steady amount over long periods of time potentially grows larger than waiting for a few years and then making up the difference. Check it out: Same total contributions, but a different result. That’s because time matters.
Finding the Money
Where do you find the extra money? Pass on a streaming service you subscribe to. Consider brown-bagging it to work occasionally. Pack a snack and skip the vending machine.Definitely put any raises or bonuses into your retirement savings efforts. And if your employer matches some contributions, try your hardest to reach that level. You’ll be surprised how a little goes a long way over time.
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Nate Obringer is a Financial Planner with, and offers securities and investment advisory services through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
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