How student loan debt affects retirement savings

Student debt can make it more challenging to prepare for retirement — and that is reflected in the retirement balances of older borrowers, Fidelity data shows.

Retirement balances are roughly 30% lower among employees over age 50 who currently have student debt, at an average of $153,000, compared to $221,000 for savers in that age group who do not have such loans, the financial services company wrote in a report published Wednesday.

Workers ages 18 to 49 with student loans have nest eggs about 20% smaller than those of their debt-free counterparts, with an average balance of $58,000 versus $72,000. Fidelity analyzed internal retirement account data, including that of borrowers enrolled in its student debt benefits programs.

“Student debt casts a long shadow,” said Jesse Moore, head of student debt at Fidelity. “It doesn’t fade with age or career advancement. It’s a structural issue that shapes financial security at every stage of life.”

Experts say the findings highlight some of the burdens of student debt: Borrowers tend to delay investing for retirement or make smaller contributions than they otherwise might have. That leaves them with less time and money to grow their savings. Even later in their careers, student loan holders aren’t catching up.

Around 9.5 million Americans over 50 carry education debt, and their average balance is about $47,000, according to an analysis by higher education expert Mark Kantrowitz.

“Every dollar people spend on repaying debt is a dollar less they have available to save for retirement,” Kantrowitz said.

Retiring with student loan debt can have ripple effects, a separate poll from Fidelity found. A third of baby boomers surveyed said they delayed travel because of their student loans, while 16% put off purchasing a house and 8% had postponed starting a business. In October, the firm polled 747 U.S. adults who are currently paying back their student loans.

Recent legislative changes from President Donald Trump’s “big beautiful bill” may only worsen the problems for older student loan borrowers, consumer advocates said.

Currently, student loan repayment plans typically range from 10 to 25 years — which already results in people bringing education debt into middle age and beyond. But, starting in July, borrowers could face repayment terms as long as 30 years.

“This approach will perpetuate a cycle of indebtedness,” said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York. “Borrowers struggling with their own debt will be unable to save for retirement or for their children’s education, inevitably leading to more borrowing.”