Will the Explosion of Student Debt Widen the Retirement Security Gap?

Source: Alicia H. Munnell, Wenliang Hou and Anthony Webb, Center for Retirement Research at Boston College, IB#16-2, February 2016

The brief’s key findings are:
In 2013, 55 percent of households in their twenties had student debt, with an average amount of $31,000.
The question is whether student debt – by reducing 401(k) savings and delaying home purchases – could have a big impact on retirement preparedness.
The analysis uses the National Retirement Risk Index (NRRI), which measures the percentage of working-age households “at risk” of falling short in retirement.
If NRRI households had started out with today’s student debt levels, the Index would be 56.2 percent instead of the already alarming 51.6 percent.
The bottom line is that college costs should be included in broader policy discussions over how to improve financial security.