America to Hit Peak 65 in 2024, Shattering Retirement Records
- 2024 will see a record-breaking number of Americans retiring, with 11,000 turning 65 each day until December, marking the “peak 65” or “silver tsunami” phenomenon.
- Important decisions need to be made at age 65, including Medicare enrollment and financial choices like what to do with a 401(k) plan and whether to retire or continue working.
- Starting retirement savings early is crucial due to the potential depletion of Social Security trust funds by 2033, highlighting the need to not solely rely on this program for retirement income.
2024 is predicted to be a record-breaking year for retirement in the United States, with an average of 11,000 Americans turning 65 each day until December. A report from the Alliance for Lifetime Income refers to this phenomenon as “peak 65” or the “silver tsunami,” as it represents the largest surge of retirement-age Americans in history. Approximately 4.1 million Americans are expected to reach the age of 65 each year through 2027.
When turning 65, individuals become eligible for Medicare, unless they are still working and receiving health insurance through their job. Part A of Medicare, which covers hospital insurance, has no premiums and is recommended even for those who are still working. Part B covers medical services and may be the primary or secondary payer depending on the coordination of benefits rules. Late enrollment penalties exist for both Medicare parts A and B, with Part B penalties being permanent.
Aside from health care decisions, financial decisions also need to be made at 65. It’s important to consider what to do with a 401(k) plan, such as rolling it over into an individual retirement account or leaving it with the current employer. The decision to retire or continue working should also be considered, taking into account the financial and cognitive benefits of continuing to work. Semi-retirement, or downshifting into a part-time job, is another option for those who still want to remain active.
Starting retirement savings early is highly beneficial, even for young individuals who may have limited funds. Compound interest can greatly increase savings over time. While Social Security is expected to still be available for future retirees, it may pay out less due to the depletion of the program’s trust funds by 2033. This serves as another reason to begin saving early and not solely rely on Social Security in the future.