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Last Update: February 27, 2023

A disturbing trend was uncovered by a survey-based study1people nearing retirement are not paying down their debt as past generations did. Instead, they are accumulating more debt. The study, Understanding Debt in the Older Population, surveyed those in their 50s and 60s. 

Rather than stockpiling money for retirement, Gen Xers nearing retirement are more likely to be:

  • Paying off mortgages
  • Dealing with credit card debt
  • Caring for dependents
  • Paying down medical bills not covered by health insurance
  • Paying off student loans for themselves, their children, or even their grandchildren

If those nearing retirement aren’t careful, they are going to find themselves struggling rather than enjoying their golden years.


Some of the factors that are increasing debt for older Americans are beyond their control. For example, the current cost of housing and medical care and the rise of inflation. As these numbers increase, the buying (and saving) power of Gen X decreases significantly. 

However, Gen X also isn’t following in the footsteps of their grandparents when it comes to eliminating debt. 

Instead of paying off their mortgage, many Gen Xers are buying bigger homes with larger price tags, setting themselves up for house payments well into retirement. 

According to the 2021 Home Buyers and Sellers Generational Trends Report2, three out of four home buyers between the ages of 55 and 65 financed their home. The median amount financed for this age group was 82%. 

With a median home price of $276,900, this means that those nearing retirement who purchased a home are likely to owe over $200,000. 

Of the 5% who chose some form of adjustable rate mortgage, they are now experiencing substantial increases in their monthly payments, which will cause a ripple effect when paying down additional debt or saving for retirement.

Student Loans

In addition to housing, Gen X is still grappling with their own student loan debt.

According to a 2022 Federal Student Aid Report3, 6.2 million people over the age of 50 carry $296 billion in debt, an average of $47,742 per borrower.

The Education Data Initiative suggests that those nearing retirement actually carry more student loan debt than younger generations – and that is in addition to all their other debt.

On top of that, many of those nearing retirement have taken on debt for their children and grandchildren.

Keep Reading: Is Student Loan Debt a Roadblock to Retirement Savings?

The National Center for Education Statistics4 found that 10% of undergrads received Parent Plus loans, with the average loan at $34,700.

A survey of consumer finances5 found that 3.4 million parents now owe $87 billion in Parent PLUS loans, with a high-interest rate and origination fee, often resulting in monthly payments of more than $300. 

High-Interest Debt

Many Gen Xers, especially those with lower incomes and less financial literacy, become victims of high-interest debt. This includes:

  • Credit card debt: Gen X has $6,527 average credit card debt, while Boomers have an average of $5,9976
  • Payday loans: About 5% of those over 507 use payday loans
  • Auto title loans: Typically have finance fees and other fees plus a high interest rate, often translating to an APR of over 300% 

Despite being expensive forms of debt, most people using these methods see them as normal, which only compounds the problems associated with debt and retirement.

Embracing Financial Education

Financial institutions have the opportunity to help those who use their services find a better way.

The Understanding Debt report found that financial literacy was key to helping younger generations avoid the problems faced by those already nearing retirement. Those with better financial literacy scores were more likely to plan for retirement, build credit, and pay their bills on time. 

Offering a financial wellness program can help users:

  • Learn about student loans and alternatives to student loans
  • Understand student loan repayment
  • Become educated on different mortgage loan products
  • Create long-range financial goals
  • Discover how much money is needed in retirement
  • Get spending under control
  • Reduce debt
  • Increase savings

Learn how Enrich can help your financial institution provide holistic financial wellness



1 - https://www.nber.org/papers/w28236

2 - https://www.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf

3 - https://studentaid.gov/data-center/student/portfolio

4 - https://nces.ed.gov/programs/coe/indicator/cub

5 - https://www.aarp.org/content/dam/aarp/ppi/2019/05/a-look-at-college-costs-across-generations.doi.10.26419-2Fppi.00063.001.pdf

6 - https://www.lendingtree.com/credit-cards/study/credit-card-balances

7 - https://www.bankrate.com/loans/personal-loans/payday-loan-statistics/

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