Navigating “Peak 65”: Challenges and Strategies for a Record-Breaking Retirement Year

Written By: Susannah Orzolek

2024 is poised to be a historic milestone for America’s retirement system, marked by what has been cleverly called “Peak 65.”

An average of 11,000 Americans are expected to reach the age of 65 every day this year, and continue at that rate until 2027. If you do the math, that’s approximately 4.1 million individuals turning 65 every year! This shift in the American demographic presents a new series of challenges and opportunities never seen before. Let’s take a closer look at its potential impact on the economy, strain on the retirement system, and the essential questions individuals nearing retirement should be addressing.

The Impact on the Economy:

The sheer volume of individuals entering retirement in 2024 carries significant implications for the economy. As millions transition into retirement, the dynamics of consumer spending, workforce participation, and healthcare utilization will undergo substantial changes. The retirement wave brings both opportunities and challenges, requiring a thoughtful consideration of its economic repercussions.

Strain on the Retirement System:

When is the best time to start taking my Social Security Benefit? What are my options for Medicare coverage and how do I navigate enrollment?

The age of 65 is crucial as it marks eligibility for Medicare. Most people enroll in Medicare at 65 (unless they have employer-sponsored health insurance). It is recommended you have a strategy for your enrollment so you know what coverage you need and when you need to enroll.

Medicare Part A:  Covers hospital insurance, even if still employed, as it has no premiums.

Medicare Part B: Covers medical services, outpatient care, and preventative services.

If covered by employer insurance, Medicare can also serve as secondary coverage.

One thing to consider: Failure to enroll on time results in late-enrollment penalties, with an additional 10 percent added to Medicare Part B premiums for each year of delay. No, thank you!

It is important to prepare and plan for your retirement and have a strategy to maximize your retirement benefits, including having a strategy for utilizing your 401k for maximum potential. Considering how time and money will be spent in retirement is essential, as we see that one in five individuals over 65 are opting to continue working. The Bureau of Labor Statistics predicts a rise in labor force participation among Americans over 65 in the next decade. Having a plan ahead of time can help you to only work when you want to work, not because you need to.

Key Questions for Nearing Retirees:

It can be daunting to be nearing retirement and navigating the next steps. Here are key questions to ask yourself as you are approaching 65:

Income: What is my strategy for income once I stop working?  How long will my income last? What is my income plan to cover any unanticipated expenses?

Income Taxes: How will my retirement income be taxed? Where does it make sense to get income from first? Will taking distributions from my 401k affect how my Social Security is taxed?  How can I keep my taxes lower retirement?

Investments: How can I protect the money I have saved? Will I earn enough through my investments to last? How can I ensure I’m diversified and protected enough?

Insurance: Am I adequately covered? Am I over-insured? Do I need an umbrella policy?

Inheritance: Are my assets in the right place for an easy transition to my heirs? Have I made a plan for any legacy goals? Do I need a will or should it be updated? Does establishing a Trust make sense?

The nature of retirement planning is multi-faceted and it’s changing. As more people begin to approach retirement age and grapple with these fundamental questions about their retirement, it will be more important than ever to have accessible resources to help navigate this transition against the backdrop of “Peak 65.” Having a comprehensive retirement plan that answers these questions can give you back the time and the security to retire the way you want to – with peace of mind.

Have any questions? That’s what we’re here for! Call us at 844-227-5766 today!

Say What?

This year Americans are expected to spend an estimated $26 billion celebrating Valentine’s Day.

  • $2.2 billion will be spent on candy
  • 145 million Valentine’s Day cards will be exchanged
  • 250 million roses are grown each year just for Valentine’s Day

This week in history

1942 – Daylight Savings Time started in 1942, and at the time was called “war time.” It was imposed to conserve fuel, and was repealed in 1945 but individual states continued to impose their own “standard” time. In 1966 Congress passed legislation to permanently set a standard time for the nation.

1952 – Queen Elizabeth The Second becomes queen of England when her father, King George VI died.

1961 – President John F. Kennedy delivered a “health message” asking Congress for a health insurance program (Medicare).

1964 (60 years ago) –The Beatles made their first visit to the US, appearing on the Ed Sullivan Show.

What did it cost?

1974 – The average price of a new car was just over $4,100.

2004 – The average cost of a new car was over $21,600.

2024 – The average cost of a new car is now over $47,900 (As of Q4 2023).

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