Today's College Grads Won't Be Able to Retire Until They're 73

Mountain of money
Sorry, recent college grads: That mountain of student loan debt you have to scale is going to delay your retirement by more than a decade.

That's the conclusion of an analysis by personal finance site NerdWallet, which looked at the dismal financial state of today's average college graduate. With a median debt load of $23,300, a 10-year repayment plan and an unemployment rate of 18 percent upon graduation, new grads aren't exactly set up to start socking away retirement funds. It all translates to about $115,000 less in your retirement fund by the time you hit the typical retirement age.

So how does $23,000 in college debt now wind up costing you $115,000 later?

It's partly a matter of interest on the loan, which winds up costing the typical grad an additional $5,000 or so by the time the debt is repaid. But the real issue is opportunity cost.

"[A]lthough the median college graduate leaves with a seemingly manageable $23,300 debt load, 7% of a student's earnings go toward yearly loan payments of $2,858 for the first ten years of his or her career," writes NerdWallet analyst Joseph Egoian. "This prevents any meaningful contributions toward retirement."

Now, if that $28,580 being doled out in loan payments instead sat in a plain-vanilla retirement account averaging a 5 percent annual return for 33 years, it would become more than $143,000.

But it won't, and as a result, the typical debt-laden college graduate won't be well-situated to retire until he or she is 73 -- a good 12 years later than the current average retirement age. Even with a projected life expectancy of 84, that's still only a decade of retirement to enjoy.

Later retirements are somewhat inevitable, even in the absence of exploding student loan debt -- as medical science extends our lifespans, you'll have to work longer simple give yourself a shot at not outliving your money. That's why it's more important than ever to contribute as much as possible to your retirement accounts and take full advantage of any employer matching you can get on your 401(k).

Even with tuition growth starting to slow, it's tough to avoid graduating college with a heavy debt load. But you don't have to follow the crowd into a seriously delayed retirement: Being smart about your education can help you get there right on schedule.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at, and follow him on Twitter at @Brownellorama.

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Curt Croatt

Going to college should be viewed as an investment and not a period of finding oneself. I went to college and double majored in physics and mechanical engineering and ill be making 75k base plus benefits out of college. College isnt a bad choice in the right fields. The millionaires that didnt go to college grew up in a different era. Now its hard to get a below average job without a degree.

December 06 2013 at 5:43 PM Report abuse rate up rate down Reply

Reverse mortgage borrowers must be at least 62 years of age and you own the home which must be your primary residence.

November 29 2013 at 7:27 AM Report abuse rate up rate down Reply


And, who said.......America is not a third world country and having to work until you die ?

November 23 2013 at 12:30 PM Report abuse rate up rate down Reply


For anyone having to work till the age of 73 is a Republican politician's dream come true. Just think you will be paying into Social Security all your life and now have only 3 years to use it before you die. Now the Republicans can start to draw from the massive Social Security Fund with hopes of never having to pay the money back.


November 23 2013 at 12:26 PM Report abuse rate up rate down Reply

I never went to college I now own a golf course and some real estate at 51

October 24 2013 at 9:13 PM Report abuse rate up rate down Reply

Because they stay in school till there 35

October 24 2013 at 9:10 PM Report abuse rate up rate down Reply

Guess what! I'm past retirement age already and I won't be able to retire until I'm 73 either.

October 24 2013 at 1:02 PM Report abuse +2 rate up rate down Reply

YOU DON'T NEED COLLEGE. If you go to college you will be in debt for decades. I've worked for millionaires who never went to college, one who never finished high school. If you go to college, you'll end up owing debt and working for someone else, while those who didn't go to college will save up their money and start their own business way ahead of you... you'll probably end up working for them. DON'T BUY THE 'YOU NEED TO GO TO COLLEGE BS'.

October 24 2013 at 11:08 AM Report abuse +2 rate up rate down Reply
1 reply to Keith's comment

you are right

October 24 2013 at 9:21 PM Report abuse rate up rate down Reply

The good news is that by they time they all turn 45 they should have jobs.

October 24 2013 at 10:32 AM Report abuse +1 rate up rate down Reply
1 reply to engservprov's comment

The bad news is by the time they all turn 45 America will be bankrupt and all that college education won't be worth squat since unemployment will be through the roof.

October 24 2013 at 11:10 AM Report abuse +3 rate up rate down Reply
carol lowery

If you have a pension plan where you work and pay into SS, don't put to much in a 401K plan, it will make 85% of your SS taxable so you will lose money thru higher taxes in retirement. By that time, I' m sure, with the way our govn is going, all of your reduced SS will be taxable. And on top of it, those taxes go into the general fund, not back into SS to help save it.

October 24 2013 at 10:01 AM Report abuse rate up rate down Reply