Retirement Isn't Out of Reach for Student Debtors, Says Ameritech Financial

401k Retirement Nest Egg

​One of the biggest draws for many to attend college is the dream of financial security that lasts well into retirement. Unfortunately, with rising education costs, this dream is shaky for many without taking out a student loan. Based on research conducted by the Center for Retirement Research at Boston College, student loans are a double-edged sword for graduates when it comes to saving for retirement; while they’re more likely to do better financially than their non-graduate peers, graduates with loans are far less likely to invest in their retirement than those without loans. Ameritech Financial is a private document preparation company that assists federal student loan borrowers with applying for federal income-driven repayment plans (IDRs). These plans could mitigate financial stress from student loans.

A dataset study was conducted that followed 9,000 teenagers who were born between 1980 and 1984, consisting of both college graduates and non-graduates. While graduates made up slightly less than half of the sample, they carried 71% of the student debt. The researchers followed up with the teens annually, and the results were startling: graduates with debt accumulated 50% less retirement wealth by the time they were 30. The size of the student loan didn’t appear to impact retirement savings; even graduates with small loans had fewer retirement assets than their peers with no student loan debt.

“Many young adults today see retirement as something that is now out of reach,” stated Tom Knickerbocker, Executive Vice President of Ameritech Financial. “I’ve heard it many times, particularly from millennials; it’s become almost a clichéd lament among them. I believe many of them are simply so discouraged by their debt, they don’t realize they have options.”

Many young adults today see retirement as something that is now out of reach.

Tom Knickerbocker

Executive Vice President of Ameritech Financial

The study suggests that graduates with debt divert their focus from planning for the future to paying off the debt they have now, impacting them greatly not only in terms of retirement but also with other assets.  Larger amounts of student debt contribute to constraints on credit, making it much harder for graduates to purchase a home. Having lower financial wealth and net worth also makes it harder to make loan payments, leading to missed payments and potential bankruptcy. Many graduates may forgo investing in their 401ks entirely, or invest so little that they don’t contribute enough to fully take advantage of the employer match.

By utilizing income-driven repayment plans for federal student loans, graduates can hopefully redirect more of their paycheck to their 401ks, diversifying where their income goes to achieve multiple financial objectives.

“At Ameritech Financial, our goal is to help students as they work to achieve more financial freedom and plan for their future,” said Knickerbocker. “Why should you have to choose one over the other?”

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional Customer Service.

Ameritech Financial Newsroom

Contact

To learn more about Ameritech Financial, please contact:

Ameritech Financial

5789 State Farm Drive #265

Rohnert Park, CA 94928

1-800-792-8621

media@ameritechfinancial.com

Source: Ameritech Financial


Categories: Financing and Student Loans, Financial News

Tags: federal student loans, income-driven repayment, retirement savings


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About Ameritech Financial

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Ameritech Financial is a document preparation company that helps borrowers enroll in the federal repayment program that matches their individual financial needs, potentially lowers payments and gets them on track for student loan forgiveness.

Ameritech Financial
5789 State Farm Drive, 265 (265)
Rohnert Park, CA 94928
United States