Getting a job is the main reason most people go to college these days. Let’s assume you can find a good job once you graduate. If you’re like millions of Americans, you’re going to come out of school with thousands of dollars of student loan debt. Just because you have this debt doesn’t mean all your other financial issues will magically wait for you to be ready for them. Retirement saving is particular pressing. That leaves you with a choice to make. Should you pay off your loans as soon as possible, or should you focus on saving for retirement? It’s a decision that can have huge ramifications later.

Option #1: Student Loan Payments First

This should be pretty open and shut right? You have to pay back loans. You don’t necessarily have to save for retirement (no matter how smart it is to do so). If you have a decent income and prioritize your student loans, it’s still probably going to take a few years before you can get them paid off completely. But if you do, they become a problem you never have to worry about again.

That said, you’ll have worked the first few years of your professional life just trying to get back to zero. Not a terribly attractive prospect.

Conversely, knocking out loans with super high interest rates is always a good idea. Letting them linger can bleed you dry.

Option #2: Retirement Saving as the Priority

This is certainly the harder option. Not only does it make your current financial life more difficult, but you won’t get to taste the fruit of that hardship for another 40 years or so. However, that fruit will be extremely tasty.

Retirement is going to be rough for younger generations. They are going to need all the help they can get. What’s more than adequate for a person retiring today, won’t be enough for someone retiring in 40 years. In fact, the retirement age is expected to jump at least five years just to maintain quality of life.

Putting off retirement saving has more than just the obvious result of less money. That effect is compounded by less interest because of the shorter period of time. Moreover, if your job has a retirement savings matching program, you miss out on that additional money too, the longer you wait.

Furthermore, depending on what kind of loan you have (federal specifically), there may be some kind of loan forgiveness deal. If you rush to pay off the loan in its entirety, you may end up paying more than you actually had to.

Why not Both?

They say you should put about 10% of your income towards retirement. You might be interested to know that bumping that up to 15% can potentially shave ten years off of your retirement age. If you put what’s left of your disposable income towards boosting the minimum loan repayments (that you should definitely be making), you can likely take care of both issues at the same time.

Let’s assume both isn’t an option for everyone and stop dancing around the question. Which should a recent graduate prioritize? The answer is retirement. You have to make payments towards your student loans. But, you don’t have to try to make huge payments to quash the debt asap. That money is better served maturing in a retirement plan so you’ll be taken care of at the end of your professional career. At the end of the day, it’s up to you. If you’d rather be debt free sooner, it’s hard to say that’s the wrong call either. A lot can happen in 40 years. Do what’s right for you!