When it came to saving for retirement, Mary Koster was killing it.
She was young, just starting her career and managing to save around 12 percent a year.
Then, in 2007, she returned to school in the hopes of advancing her career as a graphic designer. She took out federal and private loans to do so.
When she graduated, she was eager to wipe out her education debt. She decided to withdraw $10,000 from her 401(k) plan.
After struggling to find a high-paying job, she wasn't able to free herself from her student loans as fast as she had hoped. Meanwhile, the balance kept growing, thanks to interest. When she did find work, any extra money went toward her debt.
Her attitude about her golden years has since soured.
"I can't ever retire," Koster, 44, said. "The student debt just compounds and will be with me until I die."
Already, many Americans are financially unprepared to exit their working lives. As the outstanding student debt balance in the country swells – with more people holding more debt —retirement is just further at risk.
Recent research shows how student loans can force people to forgo saving for their later decades.
For example, by the time college graduates reach 30, the ones without student loans are predicted to have double the amount saved for retirement as those with them, according to a study by the Center for Retirement Research at Boston College.
Further, people with education debt have lower 401(k) balances than those without it, according to data out this month from the Employee Benefits Research Institute.
"Student loan payments are crowding out retirement," said Maggie Thompson, executive director of Generation Progress at liberal think tank the Center for American Progress. "The magic of compound interest is working on the side of the lender."
Here's what you can do.
1. Save what you can. Even if your monthly student loan bill leaves you stretched, don't assume you can't save something for your golden years.
In fact, starting earlier means you won't need to save as much on a monthly basis, said David John, co-director of The Retirement Security Project at Brookings Institution and an advisor with the AARP Public Policy Institute.
"For every 10 years you delay saving for retirement, the amount you need to save monthly roughly doubles," John said.
For instance, if you started saving in your 20s, you might need to put away just 5 percent of your income to build up a healthy retirement savings. But if you start saving in your 30s, you'll likely need to save closer to 10 percent of your earnings, John said.
That means you definitely don't want to wait until your student loan is paid off to start saving —particularly since many repayment plans are a decade in length or longer.
2. Use a retirement-specific fund. If your workplace offers a 401(k) or if you save in a traditional individual retirement account, your contributions will typically be tax-deductible. Therefore, you should opt to save through one of these avenues over a regular savings account.
"You're getting the tax benefit so the hit to your bottom line will be less," John said.
If your employer offers matching contributions on your 401(k), try to put away as much as you can, said Greg Hammer, president of Hammer Financial Group.
If you don't contribute when you can, Hammer said, "you can no longer get those matching dollars back."
3. Consider lifestyle changes. Create a personal cash flow statement to see where you can redirect money to your retirement savings, said Barry Bigelow, the lead advisor for Great Waters Financial.
"Sit down with a bank statement and go line by line for at least two months in a row," Bigelow said, adding that you might find that "oh my gosh, I spent $150 on coffee and I didn't realize that."
Other people might have to pursue different work to pay off their loan or move to another place, where the cost of living is lower, he said.
"There are cities that aren't going to be great for your nightlife, but they might be great for your pocket book," added Bigelow.
4. Pay your student loan first. If your budget is so tight that you can't save for retirement and pay off your student loan, you should, of course, focus on wiping out your debt.
"To really successfully save for retirement you need to get your current finances in order," said Craig Copeland, a senior associate with the Employee Benefit Research Institute. "Otherwise, there will be a strong likelihood you will end up dipping into the retirement savings to pay off debt."