Many Americans in their 20s and 30s have student loan balances. But it's not just younger people who are on the hook for debt payments of that nature.
AARP reports that as of the end of 2020, borrowers 50 and older owed about 22% of all student debt, and that student loan debt among people in that age group came to an astounding $336 billion. And that's not particularly shocking given that many older Americans first take out student loans later in life to help finance their grandchildren's education.
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But no matter why you're still paying off student loans, if you have a balance to contend with and you're approaching retirement, it's a problem. Once your career comes to an end, you're likely to see your income decline. From there, your student loan payments could get a lot more difficult to keep up with. So it's best to do what you can to eliminate that debt ahead of retirement, and here are two tactics you can try.
1. Rethink your spending
You may have plans to cut back on spending once your retirement becomes official. But if you want to be student debt-free by that point, the time to start slashing your spending is now.
Rather than wait until retirement to downsize, move to a smaller, less expensive home now if your kids are grown and out of the house. And instead of waiting until retirement to trade in your nicer car for a less upgraded model, make that change sooner. The money you free up could go a long way toward helping you rid yourself of student debt so it's not a problem for you once your career comes to a close and your income undergoes a big change.
2. Look to the gig economy
Just as student loans aren't only a young person's problem, side hustles aren't only for people in their 20s and 30s, either. If you're nearing retirement, it may be that you no longer have children you care for daily, so you may have the time to pick up a second job and use your extra earnings to chip away at your student loan balance.
In fact, you should know that a side hustle is a good thing to carry into retirement with you. You might appreciate having a way to earn a little extra money once you move over to a fixed income and have to start tapping your retirement savings. So if you establish yourself in a side gig now, you might not only get rid of your student debt, but make life easier on yourself a few years down the line.
Student debt can be problematic at any stage of life. But it can be especially difficult to deal with at a time when you're on a fixed income with far less wiggle room. So if you're nearing retirement and you still have a loan balance remaining, it pays to consider rethinking your spending and doing work on the side to drum up some extra earnings.
