EBRI to Host Webinar on Impact of Credit Card, Student Loan Debt

At a time when Americans’ credit card debt has reached a record high of $1.13 trillion, and following the October 2023 resumption of student debt payments, many individuals are struggling to save for the future. 

Experts at the Employee Benefit Research Institute and J.P. Morgan Asset Management are hosting a webinar on March 27 to share research about how consumers with spending “spikes,” who lack the income and cash reserves to support spending volatility, are likely to increase their credit card debt or take a loan from their 401(k) plan. 

Panelists on the webinar, “How Consumer Spending Spikes and Student Loan Debt Have a Negative Impact on Savings and Retirement,” will also discuss provisions in the SECURE 2.0 Act of 2022 that allow for changes to 401(k) plans and financial wellness programs, including emergency savings accounts and matching contributions to 401(k) plans in exchange for qualified student loan debt payments. 

The recent research by EBRI and J.P. Morgan found that making student loan payments has a negative impact on average 401(k) employee contribution rates and account balances.  

For example, the three-year-long study found average retirement account balances were lower for those who made student loan payments than for those who did not. Among employees with tenure ranging from five through 12 years, the average retirement account balance for participants who made student loan payments was $86,109, as compared with $107,687 for those who did not make payments.  

While credit card debt is on the rise and also has a negative impact on retirement savings, data from Fitch Ratings revealed that U.S. consumer spending was “remarkably resilient” in 2023, largely due to robust job and income gains, strong household balance sheets and finances, slowing inflation and improving consumer sentiment.  

However, according to Fitch, household debt increased sharply over the last four quarters, mainly because of mortgage debt and credit card borrowing, and household debt service is expected to increase to 11.7% by 2025 from 9.9% in 2023. On the positive side, credit card outstanding balance growth is starting to decelerate. 

The webinar will be held from 2 p.m. to 3 p.m. ET and feature the following panelists: 

• Craig Copeland, director of wealth benefits research at EBRI; 
• Michael Conrath, chief retirement strategist at J.P. Morgan; 
• Sharon Carson, retirement strategist at J.P. Morgan; and 
• Barb Marder, president and CEO of EBRI (moderator). 

Registration for the webinar is available on EBRI’s website.