Tag: Student Debt

Student Debt and Your Retirement Plan

For many employers student debt assistance is the next frontier in employee benefit design. And with over $1.4 trillion in student debt, second only to mortgage debt for Americans, it’s easy to see why.*

In August of 2018 a private letter ruling from the IRS that stated, under certain circumstances, an employer can link 401(k) match to student loan repayments outside the plan. You may be thinking, what does one have to do with the other. Considering that  college graduates with student debt accumulate 50% less retirement wealth in their 401(k) by age 30 than those without**, this type of program could be key in boosting this groups retirement savings.

One interesting factor is that adding student debt program like Flexmatch would likely not increase employer costs, instead just shifting them from one bucket to another, while offering an attractive option to those who may be dealing with conflicting financial priorities.

For more information on student debt matching program, contact your SRP Managing Director.

*Federal Reserve Bank of New York

** Center for Retirement Research at Boston College http://crr.bc.edu/wp-content/uploads/2018/06/IB_18-13.pdf