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New findings from LIMRA Secure Retirement Institute reveal that Millennials who begin their careers with $30,000 in student loan debt may find themselves with $325,000 less at retirement compared to their debt-free peers. 

With the constant increase in education costs, student loans are growing in number and size.  In 1990, the average student loan debt was around $10,000; by 2015, the average student loan debt is $33,000. Researchers at the Secure Retirement Institute found that a 22-year old who begins his or her career with $30,000 of student loan debt could reach retirement with $325,000 less than a peer who is not burdened with an education loan. 

The general belief has always been an investment in education was worthwhile because it would result in a higher paying career. However, the recession impacted Millennials’ at the start of their careers, with many ending up unemployed or underemployed for years after they graduated.  In addition, 9 in 10 will not have access to a defined benefit plan, and are likely to have to fully fund their retirement, far lower than their parents and grandparents. 

The good news is companies that administer 401(k) and other defined contribution (DC) plans report high participation rates by Millennials.

The bad news is Institute research finds Millennials with student loan debt are saving at a lower rate. Millennials without student loans are 60 percent more likely to maximize their employer match compared with those who are paying education loans.  

This research underscores the importance for parents and students to examine the amount of student loan debt they are willing to take on, understanding the long-term implications of this debt throughout their lives.