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

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.