Data and Research October 4, 2016

Student Loans Putting a Hole in Retirement Savings for Millennials

Student loan payments are preventing Millennials from making several investment decisions and life choices, with 38.7% saying they’ve had to delay retirement saving.

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The average student loan debt for the American Millennial is $27,162, according to a survey by online loan marketplace LendingTree. The average monthly student loan bill rings in at $317.

For many Millennials, student loans are delaying important financial decisions. The most frequently cited include saving for retirement (38.7%), buying an automobile (44.74%), purchasing a home (45.31%) and traveling (53.27%).

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When asked how much student debt affects spending ability, 30.54% answered, “Very much;” 30.40% answered, “Somewhat;” and another 14.91% said “very little.” Slightly less than one-quarter (24.15%) reported that their student loan debt had no effect on their spending habits.

LendingTree’s research also offered some insight into how Millennials would treat excess funds if student loans were hypothetically absolved. Respondents said this money will go toward saving for emergencies (53.98%), buying a home (41.76%), saving for retirement (31.68%), or travel and vacations (31.25%).

According to LendingTree’s research, the average salary for employed Millennials is $48,146. When considering factors such as taxes, Social Security payments, and insurance costs, the average Millennial is taking home 70% of gross income or $2,808 per month in this example. The study also found that student loan debt consumes about 11.3% of the average Millennial’s net monthly income.  

More than half (55.9%) of those surveyed have feelings of financial regret related to their post-secondary education. The most common is that he or she wished they went to a more affordable school (29.05%), followed by wishing they chose a different major or area of study (20.81%), or feel they should have attended a different school for their money (14.05%). 

In addition, 10.4% feel as though they shouldn’t have attended college at all, and 10.14% feel they are overeducated and paying for education beyond what is necessary for their career.

Still, the study found that several students tried to minimize the burden of student loans before even deciding to go to college. For slightly more than half of respondents (50.6%), potential student loan debt determined where and what they decided to study. The survey also found that 15.06% said they were accepted to “better” schools but couldn’t afford to go there. Another 33.2% said they didn’t apply to “better” schools because of the cost of attendance and potentially having more to pay in student loans.

These findings are from a survey of 1,338 Millennials, defined as those born between 1980 and 1995, who enrolled in at least some post-secondary education. According to the survey, 63.3% of this group graduated or will graduate with student debt, and 46.5% currently owe student loans.

Data and Research October 4, 2016

Women Disadvantage Themselves by Taking Social Security Early

Making matters worse, women spend, on average, 70% of this income on health care.
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Eighty percent of women take Social Security early, according to an online survey of 465 women over the age of 50 who are retired or plan to be within the next 10 years, conducted by Nationwide Retirement Institute. This puts women, who tend to live longer than men, at a distinct disadvantage because taking Social Security early locks in lower payments.


Social Security comprises 56% of women’s income in retirement, according to Nationwide. However, 70% of Social Security will go toward women’s health care costs. Only 5% of women wait to collect Social Security benefits at age 70 or later. More than one third (35%) of women said they were not able to do the things they wanted to in retirement, and 24% said health care costs were hindering their retirement dreams.

Looking back, 17% of women wish they had waited to collect Social Security. Among those who decided to begin their Social Security payments early, 39% said it was due to unforeseen life events, and 17% attributed it to unplanned health problems.

Thirty percent of women said that when they began collecting Social Security, their monthly payments were less than they had expected. Women who have not yet started collecting these payments expect, on average, for it to be $1,527 a month, when, in reality, it averages $1,153, and for those who started early, it’s $1,084.

A mere 13% of women spoke with a financial adviser about a Social Security strategy, and of this group, 86% said their Social Security payment was in line with what the adviser had projected.

“Too many women retirees have no retirement income outside of Social Security,” says Roberta Eckert, vice president at the Nationwide Retirement Institute. “Even for women that do, the fact that they live longer makes maximizing Social Security benefits extremely important.”

It appears that not just women, but even for affluent investors age 55 and older with a net worth between $100,000 and $1 million, Social Security will provide half or more of their retirement income, according to Spectrem Group. However, that may not come to pass, as another survey earlier this year, conducted by the Transamerica Center for Retirement Studies, found that nearly half of Americans, 47%, fear that Social Security may not exist by the time they retire.

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