11.09.2018 03.20 CDT

A recent IRS private letter ruling approved an innovative approach that allows employees to balance student loan repayments with saving for retirement.

Combining Student Loan Repayments and Retirement Savings

Combining Student Loan Repayments and Retirement Savings

By combining a 401(k) plan with student loan repayments, this approach may provide employers an opportunity to help employees meet student loan obligations without adding a costly new program.

The IRS recently approved a new plan design that allows employees to receive employer retirement contributions either by (i) making deferrals into the employer’s retirement plan, or (ii) making student loan repayments.