Saving for retirement is hard. It's even harder for those managing student loan bills.
All in, student debt reached a record $1.5 trillion this year, according to the Federal Reserve. And that debt burden has taken a heavy toll on many Americans' nest eggs.
Right from the start, college graduates who have student debt have about 50 percent less in retirement plan assets by the time they reach age 30 compared with those who have no loans, according to research from the Center for Retirement Research at Boston College.
"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.
A separate report by the Employee Benefit Research Institute also found that loans prevent younger workers from saving for retirement and result in lower 401(k) or defined contribution plan balances down the road.
The average balance was $53,638 for the families without a student loan versus $32,987 for families with a student loan, EBRI found.
But it doesn't have to be that way. Here's how to kick start a retirement plan, even while managing college debt.
"Paying down student loan debt as quickly as possible and saving for retirement as early as possible are equally important to an individual's financial well-being," according to Cindy Rehmeier, president of the executive board of the National Association of Government Defined Contribution Administrators.
"Paying off student loans while simultaneously saving for retirement is challenging but not impossible," she said. "The sooner you start, the more successful you'll be in achieving the substantial benefits that accrue from both zero debt and compounding of early savings."
Making regular payments to whittle down your student loans will enable you to make steady progress toward financial freedom.
However, you should still be contributing at least enough to your retirement plan to receive an employer match, if you are eligible for one — even if that means cutting other expenses or dialing back your spending.
Roughly 1 in 5 workers still isn't contributing enough to get a full employer match, according to Fidelity Investments. That's partly because many companies auto-enroll at a level that is lower than the match ceiling.
But that's like leaving money on the table — and forfeiting the power of compound interest over time as well.
Jeanne Thompson, a senior vice president at Fidelity, recommends bumping up your contribution by 1 percent every year until you are taking full advantage of all the free money being offered by your employer.
If your company does not offer a 401(k) or company match, consider contributing to a Roth IRA. Contributions are not tax-deductible but earnings grow tax-free. And contributions are yours to withdraw at any time without penalty.
Another freebie: You can deduct up to $2,500 of interest paid toward student loans on your federal income taxes. And you don't have to itemize to claim the deduction; however, it does phase out if you make too much.
If you do have to weigh one financial priority against another, compare the interest rate you are paying on your student loans versus the return you would expect to earn on your retirement investments.
If the after-tax interest rate on the loan is higher than the expected return on the savings, you may want pay more attention to paying down debt.
For the 2018-2019 academic year, rates run from 5.05 percent for direct loans for undergrads to 6.6 percent for direct unsubsidized loans for graduate and professional students.
If the interest on your student loans is 5 percent, it might be hard to match that return on an after-tax basis through your investments.
You may also be able to lower your interest rate on your student loans substantially, even as low as 3 percent or 4 percent, by refinancing.
But in this case, weigh your options carefully.
Refinancing a private loan will not provide options that come with a federal loan, including income-based repayment programs and loan forgiveness, for those who would qualify.
Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.
— CNBC's Lorie Konish contributed to this report.
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