For many adults in the United States, student loan repayment and retirement planning remain two major financial pressures. With more than 43 million Americans carrying student debt—and plenty still making payments well into their 40s, 50s, and even 60s—it’s easy to see how retirement saving can slip down the priority list.

At the same time, a growing number of people feel they’re not where they want to be with retirement savings. This is especially true for high-net-worth professionals and mid-career earners who are trying to juggle multiple financial responsibilities. As we recognize Financial Aid Awareness Month this February, it’s an ideal opportunity to step back and consider how these two goals can work together with the right planning.

Whether you're handling Parent PLUS loans, repaying your own education debt, or assisting with a child’s college costs, understanding how to move toward retirement while paying off loans can make a meaningful difference.

Take Advantage of Employer Benefits Through the SECURE 2.0 Act

One of the most valuable updates for borrowers is the student loan payment match now available under the SECURE 2.0 Act. If your employer has implemented this feature, each eligible student loan payment you make can trigger a matching contribution to your 401(k) or similar retirement plan—even if you aren’t putting money into the retirement account yourself.

This benefit matters because it allows your retirement savings to grow while you focus on your loan payments. You still get to capitalize on compound growth without needing to shift money away from debt repayment. This can be a huge advantage for early- and mid-career professionals who want to reduce their loan balance but don’t want to lose valuable time in building their retirement nest egg.

If you’re not sure whether your employer provides this match, reach out to your HR department or plan administrator and ask about eligibility and how to enroll.

Be Thoughtful About Making Extra Loan Payments

Paying extra toward your student loans can be a smart way to accelerate progress, but it only works if those payments are applied correctly. Many loan servicers automatically put additional payments toward future installments instead of reducing your principal balance—the amount you originally borrowed.

While that approach may make your upcoming bills look smaller, it doesn’t cut down on the interest that accrues over the life of the loan. If your goal is to pay less in interest and finish repayment sooner, your extra payments need to be directed at the principal.

The best way to do this is to contact your servicer in writing and request that all additional funds be applied to your principal. This simple step is often overlooked, but it can significantly shorten your repayment timeline. If you’re unsure how your payments are being applied, reach out to your servicer and keep a record of any instructions you provide.

Use Pre-Tax Retirement Contributions to Lower Student Loan Payments

Borrowers enrolled in income-driven repayment (IDR) plans have another useful strategy available: contributing to a pre-tax retirement account such as a traditional 401(k), 403(b), or SIMPLE IRA. Since IDR payments are calculated based on your adjusted gross income (AGI), lowering your AGI through retirement contributions can also lower your monthly student loan payment.

This approach provides a powerful combination of benefits. You’re building retirement savings in a tax-deferred account, while also reducing your immediate loan obligations. For those pursuing Public Service Loan Forgiveness (PSLF) or other long-term forgiveness options, lowering your AGI can even increase the total amount forgiven down the road.

For high-net-worth individuals, RIAs, and retirement-focused advisors managing multiple financial considerations, this strategy can add efficiency and long-term value to your overall plan.

Don't Overlook the Impact of Long-Term Forgiveness

For borrowers who qualify for programs that offer forgiveness after 10 to 25 years, it’s worth evaluating whether paying off loans aggressively is the best use of your money. While it may feel productive to eliminate the debt quickly, doing so could reduce the advantage of forgiveness programs and limit your ability to contribute meaningfully to retirement accounts.

If forgiveness is an option, increasing your retirement contributions can lower your AGI, decrease monthly payments, and ultimately raise the amount forgiven. Meanwhile, your retirement savings continue to grow in tax-advantaged accounts, supporting your long-term financial goals.

Taking a holistic view of your financial situation—your income, taxes, debt, and future goals—can help you make more strategic decisions about how to balance these priorities.

Smart Planning Helps You Advance Both Goals

Handling student loans while saving for retirement doesn’t have to be a choice between one or the other. With the right strategies in place, you can make meaningful progress on both. This may involve checking whether your employer offers a student loan–based 401(k) match, ensuring extra payments are applied to your principal, increasing pre-tax retirement contributions if you’re on an IDR plan, or evaluating whether you qualify for forgiveness.

Working with a financial professional can be especially beneficial if your situation includes multiple goals, complex income, or high-net-worth considerations. An advisor can help you run projections, understand tax implications, and determine which strategies best support your objectives.

The Bottom Line: You Can Balance Debt and Retirement

There’s a widespread belief that you must choose between paying down student loans and building retirement savings, but that’s simply not the case. With thoughtful planning—and with tools like the SECURE 2.0 Act, income-driven repayment, and forgiveness programs—managing both is more achievable than ever.

Financial Aid Awareness Month is a great reminder that financial knowledge matters throughout life, not just when you're a student. If you’re navigating student loan debt while working toward a secure retirement, this is a perfect time to reassess your plan and make strategic adjustments.

If you're looking for guidance or would like help reviewing your path forward, consider reaching out for support. A personalized approach can help you reduce your student loan burden, grow your retirement savings, and feel more confident about your long-term financial future.