Study: Student loans getting in the way of retirement

New study: Student loans are making it harder... 02:14

When Jess Sanchez got his master's degree in education, the fifth grade teacher finished with more than $90,000 in student loan debt. His first thought when he saw the bill: "Crap. What did I do?"

The 35-year-old Southern Californian was hoping to save for retirement and help pay for his 10-year-old son's college one day. But Sanchez says half his $50,000 salary will go toward paying off his loans.

Jess Sanchez and his son Jess Sanchez

"I have no budget for retirement right now. Right now I'm just trying to keep afloat financially, making sure I keep a roof over my son's head," said Sanchez.

According to a new study, the average student loan debt of $35,000 can cost graduates nearly $700,000 in lost retirement savings over a 50-year period.

How to balance student loans and retirement s... 02:46

"Your fate is you're not gonna retire 'til your 75, which is pretty sobering," said Farnoosh Torabi, a personal finance expert with NerdWallet.

Torabi doesn't think paying down college debt and putting money aside for the future should be an either/or situation. She advises millennials to modify or stretch their loans, while cutting back on expenses. Even a small savings now will pay off hugely down the road.

"Albert Einstein called compound interest the 8th wonder of the world. And I think he was right," said Torabi.

If a 23-year-old earning the median salary, who has $35,000 in student debt, saves 6 percent they can expect to retire at 75. But increase that to 10 percent and the retirement age drops by five years.

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The average student debt is now $5,500 higher than it was just three years ago. If that rise isn't somehow slowed, the student loan crisis will become a retirement crisis.

  • Anthony Mason
    Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"