How do you save for retirement while paying off thousands of dollars in student loan debt? It’s a challenge that many employees face and not just millennials.
About 35% of the 44 million student loan borrowers are 40 and older, and they owe about one-third of the $1.5 trillion in outstanding student loans, according to the Federal Reserve.
More than 50% of Americans workers who are paying off student loans say they’re sacrificing saving for retirement as a result, according to a 2016 Harris study cited by Empower Retirement in its announcement of an upcoming offering that gives employers the ability to help pay down their employees’ student debt.
Empower, the second largest administrator of of workplace retirement plans, is teaming up with CommonBond for Business, the fintech firm’s student loan benefits platform, to create a integrated retirement and debt management solution using technologies from both firms.
Fidelity Investments, the largest administrator of defined contribution plans, introduced a similar program last year.
“Student loan debt is one of the key financial barriers to saving for retirement,” said David Klein, the co-founder and CEO of CommonBond, in a statement. “Through our work with Empower, millions of people could have the ability to receive student loan benefits from their employer.”
Those employees will also have access to an evaluation of their existing loan portfolio that provides information about loan forgiveness programs and other options, including refinancing of their student loans. The Empower/CommonBond solution, which is expected to launch later this year, will also be available to IRA customers, according to Empower.