For many adults in the United States, student loan repayment and retirement planning are two major financial responsibilities competing for limited time and resources. With more than 43 million Americans carrying student loan balances—many well into their 40s, 50s, and even 60s—it’s easy to see why long-term savings often take a back seat.

At the same time, surveys consistently show that a significant portion of Americans feel they are not on track for retirement. This is especially true for high‑net‑worth (HNW) earners, mid‑career professionals, and families juggling multiple financial priorities. With Financial Aid Awareness Month taking place this February, now is an ideal moment to take a closer look at how these goals can work together rather than compete.

Whether you are paying off Parent PLUS loans, carrying your own student debt, or helping a child navigate college expenses, understanding how repayment strategies intersect with retirement planning can help you move forward confidently.

Take Advantage of Employer Benefits from the SECURE 2.0 Act

One of the most impactful opportunities available to today’s borrowers comes from the SECURE 2.0 Act, which introduced employer retirement plan matches tied to student loan payments. If your company offers this benefit, each qualifying student loan payment you make can trigger a matching contribution to your 401(k) or similar retirement plan—even if you aren’t contributing directly to the plan yourself.

This benefit can be a game-changer. It allows you to grow retirement savings while your focus remains on reducing student loan debt. In addition, you’re able to tap into the power of compound growth earlier, rather than waiting until your loans are fully paid off. This dual-track approach can be especially helpful for early- and mid‑career workers who want to chip away at their balances without sacrificing long-term savings potential.

If you’re not sure whether your employer participates, reach out to your Human Resources department or plan administrator. Ask about eligibility, enrollment steps, and how matching contributions are handled.

Be Intentional About How Extra Payments Are Applied

Making additional payments toward your student loans is a smart way to shorten your repayment timeline—but only if those payments are applied correctly. Many servicers automatically treat extra funds as early payments toward future installments rather than applying them to the principal balance.

While that may feel like progress, it doesn’t reduce the amount of interest that accrues over time. To make your extra payments count, you need to explicitly request—in writing—that any payment beyond your monthly minimum be applied directly to your principal.

Doing this consistently can help you save significantly on interest and reduce your total repayment period. If you’re unsure how your payments are being allocated, call your loan servicer, ask for clarification, and keep documentation of your request.

Lower Monthly Payments by Contributing to Retirement

For borrowers enrolled in income‑driven repayment (IDR) plans, contributing to a pre‑tax retirement account such as a traditional 401(k), 403(b), or SIMPLE IRA can reduce the monthly payment calculation. IDR payments are based on your adjusted gross income (AGI). By lowering your AGI through pre‑tax retirement contributions, your monthly student loan payment is reduced as well.

This approach offers two advantages at once: you build tax‑deferred retirement savings while lightening your current student loan payment burden. For those pursuing Public Service Loan Forgiveness (PSLF) or other long‑term forgiveness programs, reducing your AGI now may also increase the total amount forgiven later.

For RIAs, wealth managers, retirement advisors, and HNW individuals managing layered goals, this strategy can create meaningful financial efficiency. Reducing taxable income while increasing retirement savings helps align both short‑ and long‑term objectives.

Include Forgiveness Options in Your Long-Term Strategy

Borrowers eligible for long-term forgiveness programs—typically spanning 10 to 25 years—should consider how aggressive repayment impacts their overall financial picture. Paying loans off quickly can feel satisfying, but it may reduce the long‑term benefit of forgiveness and limit your capacity to prioritize retirement contributions.

If forgiveness is on the horizon, increasing contributions to pre‑tax retirement accounts can reduce your AGI, lead to smaller monthly payments, and ultimately increase the forgiven amount. Meanwhile, your retirement funds grow tax‑deferred, helping you stay aligned with your long‑term financial goals.

A high-level review of your entire financial plan—including taxes, debt, retirement timelines, and income—can help clarify whether accelerated repayment or strategic minimum payments will serve you better in the long run.

Effective Planning Can Help You Address Both Goals

Managing student loans and retirement planning doesn’t have to feel like choosing one priority over another. With the right strategies, it’s possible to make progress in both areas. This might include:

• Confirming whether your employer offers student loan-based retirement matching under SECURE 2.0.
• Ensuring any extra student loan payments are applied directly to principal.
• Increasing pre‑tax retirement contributions to reduce IDR payment calculations.
• Evaluating eligibility for forgiveness programs and incorporating them into your longer-term planning.

For those with complex income structures, HNW considerations, or multiple financial priorities, partnering with a financial advisor can provide clarity. An advisor can help you assess tax implications, compare repayment scenarios, and build a plan tailored to your personal goals.

The Bottom Line: You Don’t Have to Choose One or the Other

It’s a common misconception that you must decide between paying down student loans or focusing on retirement savings. In reality, thoughtful planning allows you to manage both effectively—especially with today’s expanded tools like the SECURE 2.0 Act, IDR plans, and a variety of forgiveness pathways.

Financial Aid Awareness Month serves as a reminder that financial literacy matters at every age—not just during college. If you're balancing the demands of student loan repayment while trying to build a secure retirement, this is a perfect time to reassess your priorities and explore smarter strategies.

If you’d like support reviewing your options or mapping out a plan, reach out anytime. With the right guidance, you can reduce your loan load, boost your retirement readiness, and move forward with more confidence.