The rising cost of student loan debt may influence how you secure your financial future. Student borrowers could end up with less savings if they pay off their student loan debt expediently. Prioritizing student loan repayment over retirement is a risk because retirement contributions are usually tax deductible.
Typically, younger people don’t make retirement savings a priority. Living expenses, student debt, rent or house payments, and other day-to-day expenses mean that retirement savings take a back seat.
Younger workers are typically more reluctant to participate in qualified plans. Retirement is far away for them, salaries are lower, and they may be struggling with bills, like rent or student loan payments. A psychological theory called Construal Level Theory (CLT) suggests that the more removed an event is from our personal experience, the more abstract it is for us.