Every month, there's probably a lot of competing demands on your wallet, such as rent, groceries, cell phone service and health insurance. All of those expenses leave many people wondering: How can I afford to save for retirement now? That's especially true if you're trying to pay down student loans. About eight in 10 adults with student loans say that their debt is negatively affecting their ability to save for retirement, according to a report on the impact of student loans by the MIT AgeLab and sponsored by TIAA.

About one in four Americans has student loan debt, with the average balance just over $37,000. The average student loan payment is $393 a month, which is almost 20% of the typical American's monthly household income. But financial experts say that despite the competing demands, when possible, borrowers should not only make room in the budget to pay down their student loans, they should focus on their retirement savings as well. "Young savers and investors who prioritize paying off their student loan while foregoing saving and investing for their retirement will most likely never catch up and remain behind," says Satoru Asato, a financial advisor with Raymond James.

Why investing early is so critical

The MIT AgeLab report found that 73% of Americans say they expect to begin or increase their retirement contributions once their student loans were paid off. But most people don't pay off their student loans until their 40s. If you wait until then to start contributing to your retirement fund, you'll lose out a lot of savings potential. That's because the earlier you start saving, the more time compound interest has to work for you. With compounding, you earn money over time on both the savings you put into a retirement account and the growth of your investment, so you're earning returns on your returns. "Many of us tend to say, 'I'll get to retirement savings later,' or 'I have all the time in the world,'" says Carrie Schwab-Pomerantz, board chair and president of the Charles Schwab Foundation. But that becomes more difficult the longer you wait. If you're in your 20s and you're making $50,000, by putting at least 10% of your income toward retirement, you should have over $1 million in savings by 65 (assuming you receive periodic raises and market returns of 6%). But if you wait until your 30s to start saving, you have to save 20% of your income to achieve a similar outcome. And in your 40s, you have to save closer to 40%. Making every penny count is particularly important because Social Security benefits are expected to drop by 2035, so more of your retirement income will need to come from personal savings. For those who make over $60,000, chances are less than half of what you need in retirement will come from the government, says Sean Pearson, a financial advisor with Ameriprise Financial. "I'm convinced that time travel does not exist in the future," Pearson says. "If it did, there would be a whole lot of pre-retirees coming back to tell their 2019 self why it's critical to balance savings and debt repayment simultaneously."

Start small if you need

Yet setting aside 10% of your income, especially in your 20s, can be a challenge. If you're struggling, experts say to focus on contributing enough to a 401(k) or retirement savings account that you qualify for any employer match offered.

I'm convinced that time travel does not exist in the future. If it did, there would be a whole lot of pre-retirees coming back to tell their 2019 self why it's critical to balance savings and debt repayment simultaneously. Sean Pearson financial advisor

Let's say you earn $50,000 and your company matches 100% of the first 3% of your retirement contributions. If you contribute $125 of your monthly income, your company is going to put an extra $1,500 into your retirement account over the course of a year. "I hear a lot that people don't have room for it in their budget, but you really want to make room — this is free money," says Jessica Goedtel, a financial advisor with Valley National Financial Advisors.

Find a balance that works for you