|The most common budget dilemma many young people now face is knowing they need to save for retirement, but also understanding they have student loan bills to pay off. It’s essential that they understand the costs of prioritizing debt repayment over retirement savings.
While it can be tempting to simply pay off that college debt and skip saving for a retirement several decades away, prioritizing paying off college loans can end up hurting them in the long run, financial experts say. It’s very important to get an early start on securing your financial future, they say.
In fact, these young people could wind up poorer in the long run if they prioritize debt repayment over saving for retirement, some advisors say. That’s because retirement contributions typically offer tax breaks, company matches and future compounding that are worth far more than the interest saved by accelerated student loan repayment.
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