Here’s the average debt load American baby boomers hold in 2024 — how does your own stack up?

04/13/2024 07:35

Some have bitten off more than they could chew.

Americans have a lot of debt. But, generally, there’s an expectation that as you get older — as you pay off the mortgage and the kids grow up — that you’ll reduce your debt load.

However baby boomers still carry a surprising amount of debt, in some surprising areas (like student loans).

Don't miss

'It's not taxed at all': Warren Buffett shares the 'best investment' you can make when battling rising costs — take advantage today
Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that. Here's how you can save yourself as much as $820 annually in minutes (it's 100% free)
Jeff Bezos told his siblings to invest $10K in his startup called Amazon, and now their stake is worth over $1B — 3 ways to get rich without having to gamble on risky public stocks

Total consumer debt increased to $17.1 trillion in 2023, up from $16.38 trillion in 2022, according to Experian’s latest study. Almost every category of debt increased in 2023, with the exception of student loan debt.

Baby boomers (ages 59 to 77) reduced their debt load during that period — but only slightly, from $96,087 in 2022 to $94,880 in 2023. Meanwhile, the silent Generation (78+) reduced it from $39,859 in 2022 to $38,600 in 2023.

Credit card debt on the rise for baby boomers

Despite managing to reduce some of their load, the Experian data shows that baby boomers have the second-highest credit card balance ($6,642) of all age groups. (Gen X carries an average $9,123). That’s up 6.4% from 2022. This demographic also saw a slight increase in mortgage debt, from $189,155 in 2022 to $191,557 in 2023.

All generations saw an increase in credit card debt; indeed, Experian reports that “the most notable movement in consumer credit markets as of late remains in credit card debt, which saw a total balance growth of 17.4% in 2023.”

For baby boomers, this increase could be related to inflation and the rising cost of living. If their retirement income is falling short, they could be using credit cards to supplement rising expenses — including medical care. They might also be tapping into their home equity for extra cash on hand.

While Americans qualify for Medicare at age 65, there are still out-of-pocket medical costs such as dental, vision and long-term care. That could mean baby boomers are relying on credit cards for medical services, medical supplies and anything else that isn’t covered by Medicare.

Read more: Suze Orman says Americans are poorer than they think — but having a dream retirement is so much easier when you know these 3 simple money moves

Student loans impact baby boomers, too

These findings track with a Scholaroo study of median debt by generation across the U.S. Like Experian, the study found that baby boomers have the second-highest average amount of credit card debt after Gen X, though the debt load varies by state.

But, perhaps surprisingly, the study also found that baby boomers have the highest student loan debt of all generations, owing an average of $43,554. That’s 64.5% higher than Gen Z.

That’s probably not because baby boomers are heading back to college en masse. Rather, they’ve likely co-signed loans for their children or grandchildren, and some may have turned to Parent PLUS loans to fund higher education for their loved ones.

These types of debts can make it difficult for baby boomers to retire — or at least to retire comfortably. And, while the Federal Reserve has suggested there shouldn’t be further interest rate hikes this year, a rising debt load doesn’t bode well for any generation (and certainly not one that should be enjoying their golden years).

Managing your debt

You might be one of the many baby boomers who’s seen an increase in your debt load over the past couple of years — whether credit card debt, mortgage debt or even student loan debt. Or, maybe you’re doing better than many of your peers in some or all of these categories.

Whatever the case (and no matter your age), it’s important to manage your debt, particularly during times of inflation and rising costs. Many financial planners recommend creating a budget and figuring out how much exactly you have left over each month after you’ve paid your bills. Look for any areas where you can cut back (or consider getting a side hustle to bring in some extra cash).

Two popular repayment methods include the debt avalanche and debt snowball. The debt avalanche focuses on paying high-interest debt first, while the debt snowball focuses on tackling the smallest debt first, so you gain momentum to tackle the big ones. You could also consider consolidating your credit card debt, either with a loan or a balance transfer credit card.

Tackling your debt sooner rather than later means you can use your retirement savings to live your best life — not pay off interest on your debts.