If you have student loans, watch out. Your retirement wealth may be reduced.
College graduates who have student debt have about 50 percent less in retirement plan assets by the time they reach age 30 compared to those who have no loans, according to research from the Center for Retirement Research at Boston College.
And just having student loans — no matter the size of those debts — was enough to affect the size of individuals' retirement savings.
"This result suggests that young graduates consider the simple existence of a student loan — rather than its size — to be a constraint on their 401(k) saving," the research said.
Not saving enough for retirement in your early years can have a lasting impact, particularly when it comes to lost investment earnings and the potential sacrifice of an employer match.
When juggling high loan balances and a long time horizon until retirement, it can be difficult to decide which financial goal should be your priority.
"In reality, most new graduates should probably be doing a little bit of both," said Christine Benz, director of personal finance at Morningstar.
That is because making regular payments to whittle down your student loans will enable you to make steady progress toward financial freedom. Meanwhile, you should be contributing at least enough to your retirement plan to receive an employer match, if you are eligible for one.
But after you reach those initial hurdles, there are some key things to consider when deciding where to put your extra money to get the most bang for your buck.