Student Loans, Debt, and Retirement
Letter the Editor on Student loans, Debt, and Retirement
I am writing in response to an article written by Mason Braswell’s “Generation W(on’t be Able to Retire” featured in On Wall Street. It is clear that generation “X” will face a new set of challenges with their future plans of retirement. The large amount of student debt they accumulate will have worse affect’s on their financial future’s than the baby boomers before them It is noted that students now should see student loan repayments as a part of their financial obligations after receiving their degree in the same manner as buying a car or a house. It is questionable if this generation will ...view middle of the document...
Representatives for Wells Fargo, retirement planning, report that in a retirement survey recently completed data complied showed that “debt was “overwhelming” for 42% of respondents, which was twice the rate of boomers who were also surveyed” (Braswell, para 5). High debt for this generation has been directly related to student loans, decreasing pensions, and people living longer. Studies are revealing that unless this generation plans to save and spend less they will be worse off than their parents.
Additionally many individuals report they have not saved for retirement and have no plans for saving money. This generation explains that high debt dampens any chance of attempting to start saving money. A large part of their high debt is related to extreme amounts owed on school loans. Another explanation is this generation has not had the best of influences for financial planning. High amounts of debt may be related to boomers negligence in teaching their children the skills of financial planning. Wells Fargo retirement specialist have reported in a survey completed in 2012 outstanding student debt was over 1 trillion dollars. This parallels one of the reasons this generation is unable to initiate a savings plan in the early years of their lives.
As the mother of a child with student loans that have accumulated to about $121,000 after completion of her degree. This was her reward for receiving a Master’s degree in Education. Her expected loan repayment amount is $684.00 per month. She was 27 years old when she completed her degree. I have to ask how this large amount of debt at 33 years of age will affect her life plans for having a home, a car, or supporting her family. How will it be possible to budget for retirement with a student loan that will have such an impact on her financially for many, many years to come? Could financial counseling be one avenue to help her develop a plan to repay her debt and prepare for retirement?
Retirement specialist may be the answer to help this generation reduce...