It would be fair to say that baby boomers were born at the right time. Many entered the workforce when unemployment levels were low and had established careers by the time more recent crises like the Great Recession erupted. Boomers also benefitted from proportionately lower higher education costs than younger generations, allowing them to embark on successful careers without being weighed down by student debt at the start.
Despite the strong start many boomers had, a large number are carrying substantial amounts of debt at a time when they should be gearing up for retirement or, worse yet, are already there. Recent data from mid-2025 shows that while overall debt has dipped slightly to an average of $92,619, specific high-interest categories remain stubbornly high.
The average credit card balance among baby boomers was $6,795 as of 2025, while the average personal loan debt remains a significant burden. Average auto debt for boomers has risen to $22,583, reflecting the increased cost of vehicles in recent years.
It’s also worth noting that while many boomers sit on home equity, that generation carried an average mortgage balance of $196,227 as of 2025. Furthermore, nearly 20% of boomers now utilize Home Equity Lines of Credit (HELOCs) with an average balance of $40,837, essentially tapping into their primary retirement asset to cover modern cash flow needs.
Why baby boomers continue to carry debt
While debt is a problem at any age, it’s particularly concerning for boomers who may be gearing up to end their careers or living on a fixed income. Healthcare costs continue to climb, but two modern factors are increasingly responsible for the squeeze: student loans and the “parental support trap.”
Boomers now hold the second-highest average student loan balance of any generation at $39,870, often due to Parent PLUS loans or pursuing late-career degrees. Simultaneously, the “boomerang” effect has seen nearly 18% of adults aged 25-34 living at home. Reports indicate that 50% of parents providing this support believe it is actively harming their own financial security.
Many are also facing the “Interest Rate Lock-In.” Those who did not downsize prior to the rate hikes of 2023 now find themselves trapped in larger, expensive homes because moving would mean trading a legacy 3% mortgage for a much higher current market rate.
How baby boomers can shed their debt
It’s hard enough juggling debt when you’re working, but as a boomer, you must eliminate non-mortgage debt that costs a boatload of interest. Consolidating various debts into a personal or home equity loan remains a viable option to gain predictability with fixed interest rates and set monthly payments.
Beyond traditional consolidation, families should consider “Multi-Generational Budgeting.” This involves having open financial meetings to set clear timelines for when adult children will take over individual expenses like mobile phone plans or insurance. This transition is vital for protecting the parents’ remaining retirement savings.
Finally, downsizing remains a powerful tool, though it requires careful calculation in the current rate environment. Reducing a household from two cars to one or moving to a lower-maintenance property can free up the cash necessary to whittle down high-interest balances and improve overall wellbeing.
Editor’s Note: This article has been updated to include 2025 and 2026 financial data regarding average credit card, auto, and mortgage balances. New sections have been added covering the impact of Home Equity Lines of Credit (HELOCs), the rise of student loan debt among older adults, the “interest rate lock-in” effect on housing, and multi-generational budgeting strategies.
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