4 Keys to the Millennial Balancing Act of Paying Off Student Debt and Saving for Retirement

The financial puzzle for millennials: What’s the best way to pay off student debt while saving
toward retirement? Here are four steps to a sustainable plan.

Millennials really like the idea of retiring early. In fact, when Charles Schwab surveyed 2,000 millennials aged 16–25, the average age at which they expect to retire is 60 years old. That is a whole seven
years earlier than the current Social Security full retirement benefit eligibility for their age bracket and several years earlier than the average retirement age.

Moreover, based on the average millennial’s saving patterns, this goal of retiring early is not entirely realistic. According to the National Institute on Retirement Security, approximately 66% of people aged 21–31 have nothing saved for retirement. Meanwhile, Fidelity found that as of the third quarter of 2022, those aged 25–34 have an average 401(k) balance of $22,100. Thirty-somethings have slightly more, an average balance of $63,800. Although these young adults as a group are putting more money away for
retirement than they were a few years ago (when millennials had an average balance of $13,100 and contributed 5.9% of their income), it appears that most of them will not be on track to retire in
their early 60s.