2024 Marks the Beginning of “Peak 65,” as More Americans Reach Retirement Age Than Ever Before — and It’s Not Slowing Down for a While

You may know that according to the Chinese zodiac, 2024 is the Year of the Dragon. It’s also the year of the African violet, according to the National Garden Bureau and the International Year of Camelids per the Food and Agriculture Organization of the United Nations. (Camelids is a category of mammal including camels, llamas, alpacas.) News media are starting to report on another designation for 2024: It’s the beginning of the “Peak 65” zone, when millions of Americans are retiring.

Here’s a closer look at the Peak 65 phenomenon and what it may mean for you.

Image source: Getty Images.

Meet Peak 65 — the “silver tsunami”

The Alliance for Lifetime Income (ALI) recently released a report detailing the “Peak 65 Zone,” the period between 2024 and 2027 that will see record levels of Americans turning 65 and hitting a common retirement age. Specifically, about 4.1 million Americans will turn 65 this year, more than 11,000 each day, and that level should continue for a few more years. By 2030, a mere six years from now, all baby boomers — those born between 1946 and 1964 — will have turned 65.

As you might have guessed, the ALI is concerned with retirement income, and it has offered some sobering statistics for those in around the Peak Zone:

• “When the Peak 65 generation entered the labor market in 1980, about 60% of private sector workers relied on [pensions] as their only retirement account, as compared to 4% in 2020.”
• Social Security provides around 37% of retirees’ income.
• “The majority of Peak 65’ers (66%) are worried about having enough money for retirement, 79% are worried about the cost of healthcare in retirement, and only 24% are “very optimistic” about retirement.”

What those retiring in 2024 or in the coming years should know

Those are some scary statistics. If you are worried about your retirement being at risk, here are some important things to know:

• Social Security: The average monthly Social Security retirement benefit was $1,909 as of January, amounting to nearly $23,000 annually. You can aim for more than that by employing any of several strategies, such as delaying when you start collecting Social Security and/or boosting your income. (Know, too, that there’s a chance that Social Security benefits will shrink in about a decade.)
• Annuities: The best thing about Social Security is that it will keep paying you for the rest of your life. It’s hard to get such reliable income, but you can aim for it with annuities. With an annuity, you fork over a hefty sum to an insurance company (ideally a highly rated one) and in exchange, it promises to pay you according to the terms you chose. Fixed annuities are the most straightforward kind of annuity and often the least problematic, though other kinds may serve you well, too.
• Reverse mortgages: A reverse mortgage is another way to secure reliable income for retirement, though it’s not a strategy that will work for all. It involves receiving a lump sum or regular income from a lender via a loan — using your home as collateral. Read up on them if you’re interested and weigh their pros and cons.
• The power of delaying retirement: You’re not alone if you’re thinking that you haven’t saved enough for retirement. But you can significantly improve your financial health by working a few more years than you planned to. Sure, it’s not a welcome idea, but delaying retiring can be a powerful move. For example, if you retire at 68 or 70 instead of 65, you’ll have more years in which to save and invest money for retirement and your nest egg will have to help support you for fewer years.

What the rest of us should keep in mind

A key lesson here is the value of saving and investing for retirement — and starting to do so sooner rather than later. If you can amass a hefty nest egg, you can convert some of it into one or more annuities to provide regular income that will supplement your Social Security benefits. A hefty nest egg may also be invested in a suite of dividend-paying stocks to generate additional income.

The following table can give you an idea of what you might achieve over time:

Data source: author.

So start thinking and planning for your retirement, even if it’s decades away, because by starting early, you can secure a comfortable retirement for yourself — if not an early retirement!