Student loan debt is often portrayed as a problem that affects the young -- but recent grads aren't the only ones with big loans.

Recent research on student loan debt showed billions of dollars owed by people over the age of 50, including a fortune in educational loans still being repaid by people who are 62 or older.

A middle-age woman sitting in an office looking thoughtful.

Image source: Getty Images

When you're in your 50s or 60s, monthly payments to the Department of Education and private student lenders could have a major impact on your ability to retire.

Avoiding this situation is ideal, but if you have student loan debt as you’re nearing retirement, it's important to understand the options available to you. Here's what you need to know.

Student loan debt could make it hard to retire on time

According to The Ascent's research, people ages 50 to 61 have $224 billion in outstanding student loan debt. People 62 and older still owe $68 billion. 

Monthly payments could affect how much you can put into a 401(k) or another retirement account. Those payments could even make it impossible to save at all. The Ascent's research revealed that the average monthly student loan payment among borrowers whose loans aren't in deferment is $393. If you're devoting almost $5,000 per year to your educational debt, you can't use that money to prepare for retirement. 

When you're thinking about leaving work, that loan payment may be even more of a burden. The average Social Security benefit in 2019 is just $1,461 per month. A $393 student loan takes up close to 30% of that. This could leave you with a serious income shortfall if you don't have a ton of investments that produce income. 

How to avoid student loan debt as a pre-retiree or retiree 

Because student loan debt can make you unable to save for retirement or leave the workforce, it's important to do everything you can to avoid educational loans late in life.

If you have kids, encourage them to take out their own loans instead of taking out loans in your name for them. Although it may not be fun for your kids to borrow for their education, it'll be worse for everyone if you can't afford to retire or have to rely on your children for support. You can also encourage your kids to look for scholarships or attend a less costly school so you can save.

Here's the bottom line: If borrowing to help your children affects your retirement, you cannot afford to provide this assistance. 

If you have debt from your own education, try to stick with a standard repayment plan to pay it off in 10 years. Avoid putting the loans into deferment or forbearance for long periods, too.

Although the government subsidizes interest on Direct Subsidized Loans during forbearance, interest accrues when you pause payments at other times. This increases the likelihood that you'll still be paying off loans in your senior years.

What to do if you have student loan debt as a pre-retiree 

If you're in debt and nearing retirement age, you have a few options.

Pay off your student loans so you can retire

You can pay off your student debt ASAP so you don't have loans hanging over your head.

But there's a problem with this approach. Federal student loans usually have a lower interest rate than what you could earn if you invested in the stock market. It's often a better financial decision to invest than it is to put more money toward your loans. And paying off your loans without investing for the future isn't good. You need investments to produce income during your retirement years. 

Reduce your payments and invest

You could also try to reduce your loan payments as much as possible so you have more money to invest. This also means you don't have to take as much out of your retirement savings to repay your loans. You could do this by signing up for income-driven payment plans that cap payments at a percentage of your income.

By reducing your monthly payments, you can devote more to investing for the future -- but you'll be stuck with your loans much longer and will owe a lot more in total interest. 

Pass responsibility for your kids' loans to your kids

If you took out loans for your kids, find out whether they can take responsibility for the debt so you can save for retirement.

Most private student loan refinancing lenders allow refinancing only by the person who currently owes money on the loans. But your kids may be able to take out a personal loan and use the proceeds to repay the amount you borrowed. 

Student loan debt is a burden for retirees

Student loan debt is a major burden for people in their 50s and 60s. Be smart about how you borrow and how you repay what you owe. By doing so, you can hopefully ensure that you're able to leave the workforce when you're ready. You don't want to be forced to work longer just because of your educational loans.