Most workers hope to be free from financial responsibilities such as debt by the time they reach retirement age. But for a growing number of employees in the U.S., debt is proving difficult to shake. Just like younger employees, older workers are experiencing increasing levels of debt, including credit card balances and, surprisingly, student loan debt.
More than 70% of Americans age 55 and over carry some form of debt, and over half report that this financial burden has “held them back” in life, according to a February 2025 National Debt Relief survey. For older borrowers, debt not only inhibits retirement savings but can also mean needing to work far longer than they had planned. Entering retirement with debt is particularly risky, as fixed incomes can make repayment more difficult. Of the 2,000 adults surveyed, 67% of non-retired respondents in debt stated they now expect to work past their planned retirement age to support themselves and their families.
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Key Points
• Over 70% of Americans age 55 and over carry some form of debt.
• High-interest debt like credit cards can significantly hamper retirement savings for both Gen X and Boomer employees.
• A quarter of all outstanding student debt is held by people age 50 and older, with average balances around $45,000.
• HR professionals can help by tailoring debt counseling and student loan repayment benefits to address older workers’ needs.
• Benefits like employer-matched 401(k) contributions for student loan payments can benefit older employees with their own or Parent PLUS loans.
Understanding Good and Bad Debt
Of course, some debt can be essential to smart financial planning for your employees. Taking out a low-interest mortgage for a home, for example, can be a wise investment that increases an individual’s net worth, while increasing their quality of life.
But high-interest credit card debt can significantly hamper an employee’s financial wellness, including retirement readiness. Unfortunately, 53% of Gen Xers (ages 46 to 61), and 43% of boomers (ages 62 to 80) carry a balance from month to month, according to Bankrate’s 2026 Credit Card Debt Survey.
For a growing number of employees, student debt is also standing in the way of retirement planning — and not just for recent grads. In the first quarter of 2025, 26% of all outstanding student debt was held by people age 50 and older, according to the U.S. Department of Education’s Federal Student Aid office. Borrowers aged 50 to 59 have an average student loan debt balance of $45,126.
What HR Pros Can Do for Older Employees Carrying Debt
The good news? It’s likely you already have plenty of benefits on hand that can help with the debt/retirement readiness dilemma. It’s a matter of making sure these benefits are flexible enough to be targeted toward and communicated to older workers. The following steps can help ensure that your organization is offering the benefits your employees — of all ages — need to adequately prepare for retirement.
Beef Up Your Debt Counseling Services
Effective debt management is important for the financial well-being of any employee. But for older employees, who have less time to save for retirement and may soon be facing a decline in income, debt can be an even more pressing concern.
Review your financial planning and debt counseling services — whether they are implemented in-house or through a vendor. Make sure that debt counseling is delivered in a way that addresses employees at different ages and stages of life. You may even want to consider segmenting debt counseling by age so the solutions accommodate older employees with a different debt payback and retirement planning time frame.
Review Your Student Loan Repayment Benefits
Student loan repayment benefits are often geared toward recruiting and retaining younger employees. And that’s great. But these benefits can also be a secret weapon for your 50-plus crowd too. Let’s take a closer look.
• Employer-sponsored student loan repayment: Employers can contribute $5,250 annually per employee toward tuition reimbursement or student loan payments on a tax-exempt basis. The “One Big Beautiful Bill Act” (signed July 2025) made this benefit — which was set to expire at the end of 2025 — permanent. Starting in 2027, this $5,250 limit will be adjusted for inflation. This can be a big bonus for recent grads, as well as older employees.
• Matching 401(k) contributions for student debt repayment. The Secure Act 2.0, formally authorizes matching contributions for student loan repayment, allowing companies to match employees’ qualified student loan payments with contributions to their retirement accounts, including 401(k)s, 403(b)s, SIMPLE IRAs, and government 457(b) plans. This program might seem designed to benefit younger employees, who may be choosing between paying off their student loans and contributing to their retirement accounts. But don’t overlook the fact that older employees (who may still carry their own student debt or have Parent PLUS loans) could get a boost from this benefit as well.
Keep Employees Up to Date on Student Loan Forgiveness
Following the rollback of certain income-driven repayment plans, employees need clear guidance on which, if any, federal forgiveness programs remain available to them. No employer wants their employees to miss out on these and other lucrative benefits, or fall behind on the latest student loan news.
Consider offering online education tools and personalized counseling support to help employees — from recent grads to older borrowers — navigate the ever-changing landscape of repayment and forgiveness programs. At the same time, it’s crucial to make sure your team has the resources to stay current and relevant to your employees.
Tailor Retirement Counseling to 50-Plus
Whether your older employees are worried about debt or not, retirement planning changes once your employees enter their fifties and beyond. Consider offering access to retirement advisors who can assess older employees’ retirement preparedness and offer strategies to help them accumulate retirement savings, while paying down debt.
Educating employees on retirement savings catch-up opportunities — and encouraging them to take advantage of them — can further boost employees’ retirement readiness. Currently, adults age 50 and older can make additional contributions to their retirement accounts. Under the SECURE 2.0 Act, high-earning individuals making at least $150,000 in the prior year must make their catch-up contributions on a Roth (after-tax) basis starting in 2026.
The Takeaway
Understanding the connection between debt and retirement readiness among all of your employees, but especially those nearing retirement, is a top challenge for benefits pros.
Sofi at Work is here to help with financial education resources, platforms, and tools you need to make sure your older employees are retirement ready.
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