While student loan debt is a concern for Americans of all ages, for those approaching retirement still burdened with repayments from their younger years is particularly worrying.
A new report reveals that 13% of the 64 million Gen Xers in the U.S., roughly aged 42-58 years, have student loan debt of $40,000 on average with the median amount of $25,000.
The analysis from the National Institute on Retirement Security found that this cohort is more likely to be low net worth and less likely to be on target with their retirement savings, at least partly due to their student loan debt. Conversely, they are more likely to be higher earners.
Fortunately, Gen Xers with student loan debt have higher sponsorship rates (76%) and participation rates (66%) in employer-sponsored retirement plans.
“The good news is that attending college has increased Gen Xers’ earning power and access to workplace retirement plans,” said Tyler Bond, NIRS research director. “But every dollar they continue to spend on college loans is money that could have been invested in their retirement. Retirement is going to be a nightmare for too many Gen Xers, and those who continue to have the burden of debt could be saving more for this major challenge.”
Among other findings are that Gen X women (60%) are more likely than Gen X men (40%) to have student loan debt, as are Black Americans who make up 10% of the generation but 22% of Gen Xers with student loan debt. Asian Americans from Gen X are least likely to have student loan debt.
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