Let’s Meet the Challenge of America’s Historic Peak 65 Moment With A New Approach to Retirement Security

The greatest surge of new retirees in the nation’s history is fast approaching. In a mere three years, the US will have more 65-year-olds than ever before. With more than 10,000 people turning 65 every day, it’s a number that will increase to more than 12,000 a day until the nation reaches its Peak 65™ moment in 2024.1 Our nation’s retirement system will be tested like never before, and with far-reaching impact on our economy and society at-large. Like a wave racing towards the shoreline, the unprecedented surge of retirement-age Americans is now coming into focus as it begins to crest.

For generations, a sound construct for retirement security consisted of three pillars—employer pensions, personal savings and Social Security. But it was devised for a landscape that has dramatically and fundamentally changed since the baby boomers entered the workforce. Most of our private and public retirement systems have become obsolete. A recent estimate by the Center for Retirement Research at Boston College found that as many as 50% of households are “at risk” of not having enough income to maintain their standard of living in retirement.2

Consider the following:

  • When large numbers of baby boomers entered the labor market in 1980 (the oldest boomers entered the labor force in 1964), 60% of private sector workers relied on the protected lifetime income from a pension plan, as compared to 4% in 2020.3
  • Public pension plans are underfunded by anywhere from $1 to $4 trillion.4
  • Social Security was only designed to replace about 40% of income in retirement for the average worker,5 but many people rely more heavily on it today because they lack other sources of protected lifetime income.6
  • Americans lose as much as $3.4 trillion in potential protected lifetime income from Social Security benefits by claiming before they reach full retirement age.

The flaws and limitations of the nation’s private and public retirement systems are brought to the forefront by the Peak 65™ generation, but the problem doesn’t stop with them. As the number of defined benefit plans continues to decrease, and the life expectancy of Americans continues to increase, succeeding generations will lack the protected lifetime income they need for a financially secure retirement.

A new retirement security framework is needed that focuses on the need for sufficient protected lifetime income to ensure that Americans can maintain their standard of living in retirement.

To meet this challenge, we have issued a collective call to action to those with important roles to play in providing retirement security for Americans, including employers, public policymakers and financial professionals. More Americans need protected income they can count on in retirement. Let’s start a conversation about how we can realize that vision.

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