What should be your priority?

Student loans are a huge problem in our country, with the national student loan debt hitting a record $ 1.6 trillion.

At the same time, however, pensions are becoming less and less common and the social security system is experiencing new and worsening problems. Planning for retirement income is moving from the three-legged stool model (combining pensions, social security benefits and savings) to the model YOYO model (you are alone).

So how do we know what to prioritize to move forward?

What we cannot borrow for.

There is a loan for almost everything in this world – college, houses, cars, weddings, vacations – but the only thing we can’t borrow for is retirement.

If you put off saving for retirement to pay off other debt, you’ll reach retirement age and find that you don’t have the financial means to retire.

If you are in your early twenties or thirties, you might be wondering, “why should I worry about retirement now?” Retirement seems to be in a lifetime, and in some ways it is. But if you don’t start now, you can’t take advantage of factors like compound interest that can make a huge difference in your future.

If you have student loan debt and you’re trying to maximize your payments to get rid of it faster, consider making the minimum payments and putting that extra money into a Roth IRA or HSA. In the future, you will thank yourself.

The Aircraft Safety Conference.

Sometimes the student loans we pay aren’t even ours. Funding our children’s education is great if you are able to do it, but if it interferes with your ability to save for your own future, maybe it is time for Junior to take charge of the payments.

When you get on a plane, they always give the same sermon on safety. If the pressure in the cabin drops, the face masks will drop from the ceiling. Secure your own masks before helping children and those around you.

It doesn’t seem natural to put yourself before your children, but you cannot help them if you are unconscious.

The same goes for finances. If you help pay for your children’s education instead of saving for your future, you had better hope that they will find a good job with a nice home, because you will be living with them in retirement.


Retirement savings come first.

If you achieve financial independence and have long term savings and investments that have reached a point where you can live off your income, this will allow you to do whatever you want with that money, including paying off student loans. or pay for your studies.

There are certainly exceptions, as there are some expensive student loans and other situations where cash flow would improve by getting rid of student loan debt first. But my general feeling is that retirement comes first. Everything else, the things you can borrow for if needed, comes second.

The views expressed in this commentary are those of the author and do not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations to any person. It is suggested that you consult your financial professional, lawyer or tax advisor regarding your personal situation. Comments on past performance are not intended to be forward-looking and should not be taken as an indication of future results.

Securities offered by Kestra Investment Services, LLC (Kestra IS), member of FINRA / SIPC. Investment advisory services offered by Kestra Advisory Services, LLC (Kestra AS), a subsidiary of Kestra IS. Brotman Financial Group, Inc. and BFG Financial Advisors are not affiliated with Kestra IS or Kestra AS.

Investor Disclosures: https://bit.ly/KF-Disclosures

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