loan debt is affecting workers’ potential to retire comfortably, according to a survey from Aon Hewitt.
Workers with student loans are participating in
employer-sponsored retirement plans at a lower rate than those without outstanding
student loan debt (71% compared to 77%). In addition, the study found that slightly more
than half (51%) of workers with outstanding student loan debt are contributing
no more than 5% of their income toward retirement plans.
According to Aon Hewitt, saving less than 6% of
pay can significantly impact retirement readiness, especially because most
workers miss out on full company matching contributions. For example, a worker
saving just 4% of pay will have accumulated a 401(k) plan balance of $351,407
at age 65, while someone saving 6% will have a balance of $527,110 at age 65—a
difference of $175,703.
"It is heartening to see that
participation in employer retirement plans is as high as it is for workers with
loans," says Rob Austin, director of Retirement Research at Aon Hewitt.
"These workers see the value in saving for retirement, but their loans are
creating a speed bump. They don't need to shoulder this financial burden on
their own. More employers are offering resources to help with overall financial
well-being, budgeting and managing student loan debt. A few are even going so
far as helping workers’ pay off their loans."
NEXT: Student Loans Affecting Financial Well-Being