It would be fair to say that baby boomers were born at the right time. Many entered the workforce when unemployment was low and had established careers long before crises like the Great Recession arrived. Boomers also benefited from proportionately lower college costs than younger generations, allowing many to launch careers without the student debt anchor that now burdens millions of millennials and Gen Zers from day one.
Despite that strong start, a large number of boomers are carrying substantial debt at the precise moment they should be winding down their working lives or, in many cases, are already retired. According to Experian’s 2025 consumer data, total average debt for the generation sits under $93,000, which is less than younger generations carry. The problem is not the headline number. It is the composition: high-interest balances that compound against fixed or shrinking incomes, and specific categories that remain stubbornly elevated.
The average boomer credit card balance stood at $6,795 as of mid-2025, while average auto debt reached $22,190, a figure that reflects the sustained rise in new and used vehicle prices over the past several years. Boomers who carry mortgages owed an average of $194,334 in 2025. On top of that, Experian data shows that 19.5% of boomers hold a Home Equity Line of Credit, the highest rate of any generation, with an average HELOC balance of $40,837. Many are essentially drawing down their primary retirement asset to cover everyday cash flow.
Context matters here. Boomers simultaneously hold 51% of the nation’s wealth despite accounting for less than 25% of its total consumer debt, according to Experian. The generation is asset-rich, but a meaningful share of those assets are locked in illiquid home equity, and the debt that remains carries real monthly costs on incomes that are no longer growing.
Why baby boomers continue to carry debt
Debt is a problem at any age, but it becomes particularly acute for boomers who are approaching the end of their earning years or already living on a fixed income. Healthcare is the most immediate pressure point. Fidelity’s 2025 Retiree Health Care Cost Estimate found that a 65-year-old retiring this year should budget roughly $172,500 for healthcare and medical expenses across retirement, a 4% increase from 2024. That figure covers Medicare premiums, copayments, deductibles, and out-of-pocket prescription costs, but it does not include long-term care. The Employee Benefit Research Institute reports that more than 40% of retirees say their healthcare expenses are higher than they anticipated. One in five has never planned for them at all.
Student loans add a second layer of pressure few would have predicted for this age group. Boomers carry the highest average student loan balance of any generation at $39,870, according to 2025 data from EducationData.org, a figure driven primarily by Parent PLUS loans taken out to finance their children’s education. The average boomer borrower owes nearly 20% more than the national average for all student loan holders. These are not small balances that will resolve quickly, especially at current interest rates.
The “boomerang” effect compounds the squeeze further. According to Pew Research Center analysis of Census data, 18% of adults aged 25 to 34 were living in a parent’s home as of 2023. That rate has since climbed: the 2024 American Community Survey found that 32.5% of adults aged 18 to 34 are living with parents, up from 31.8% the year before, driven by high rents and elevated mortgage rates. Thrivent’s 2025 Boomerang Kids Survey found that 38% of parents providing this support say it has actively impacted their long-term retirement savings, while a separate Savings.com study found that parents supporting adult children spend more than twice as much on that support each month as they contribute to their own retirement accounts.
A fourth factor is the interest rate lock-in effect on housing. Boomers who did not downsize before the Federal Reserve’s rate hikes of 2022 and 2023 now face a costly trade-off. Moving would mean giving up a legacy mortgage rate often at or below 3% in exchange for today’s market rates, which remain well above 6%. Nearly two-thirds of boomers with a mortgage have a refinanced loan, according to Freddie Mac, which makes that locked-in rate a financial anchor they are reluctant to surrender even when a smaller home might be more practical.
How baby boomers can shed their debt
Managing debt in the years around retirement demands a different approach than it does during peak earning years. The priority should be eliminating non-mortgage debt that carries high interest rates, particularly credit card balances where APRs now average around 22%, according to Experian. Consolidating multiple high-rate balances into a personal loan or a fixed-rate home equity loan can bring predictability to monthly payments and reduce total interest paid over time.
Families dealing with the boomerang burden should also consider structured conversations about financial timelines. Setting clear deadlines for when adult children will take over specific expenses, such as mobile phone plans, car insurance, or health coverage, can protect retirement savings without cutting off support entirely. Thrivent’s research found that 60% of young adults living at home say their parents have never explained how that support affects the parents’ own financial planning. Transparency itself can be a catalyst for change.
Downsizing remains one of the most powerful debt-reduction tools available, though it requires careful math in the current rate environment. The decision is not purely about swapping a large mortgage for a small one. Reducing a household from two vehicles to one, or moving to a lower-maintenance property, can free up several hundred dollars a month that could instead go toward eliminating high-interest balances. For boomers still working, 2025 is also a meaningful milestone: it is “Peak 65,” the year when roughly 12,000 Americans turn 65 every single day. That demographic pressure makes planning now, rather than later, more urgent than ever.
Editor’s note: This article has been updated to reflect 2025 Experian data showing boomer average auto debt of $22,190 and mortgage balances of $194,334, corrects the article’s prior claim that boomers hold the “second-highest” student loan balance (they hold the highest, at $39,870 per EducationData.org), replaces an unsourced “50%” parental-sacrifice statistic with the 38% figure from Thrivent’s 2025 Boomerang Kids Survey, and adds Fidelity’s 2025 healthcare cost estimate of $172,500 per retiree.
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