So, should you repay your student loan or save? The short answer is: try to do both.
We were told that going to college and getting a degree would lead to getting a well-paying job. However, in this economy just landing a job, much less a well-paying job is a major coup. Unfortunately, many now have a degree and a great deal of student loan debt to go with it.
Your student loans may seem daunting, but see if you can reduce your loan payments. You may be able to qualify for an income-based repayment plan. This could lower your monthly payments and free up money to put toward your retirement.
Here’s a link for more information about a repayment plan: https://studentaid.ed.gov/sa/
To get started on your retirement savings you can join your employer’s 401k program, especially if the employer matches your contribution. It is better to start doing this when you are still in your 20’s because of the compound interest to be earned. If you wait until you are in your 30’s the amount of interest to be earned could be almost 50% less than if you had started earlier.
Of course, if your student loan interest rate is higher than 8% or 9%, you may need to prioritize paying off this debt first. The important thing is to develop a plan that works best for you and your budget.