Written by: Tim Seifert
We celebrated Annuity Awareness — and also a huge wave of retirees turning 64 this year and hitting Peak 65 next year!
The cohort of 8-year-old American school children sitting at their desks in May of 1967, when the Beatles’ Sgt. Pepper’s album dropped, little imagined that one day they would be the greatest surge of retirees in history, headed straight for us in 2024.
Peak 65: The biggest retiree surge in U.S. history
Boomers are hitting retirement age and preparing to live out their retirement dreams. It’s been a slow-motion demographic tidal wave. Here at Lincoln Financial Group, it’s been Annuity Awareness Month every day for a long time. Preparing for this surge has been a priority for our business for the past few decades.
As The Alliance for Lifetime Income explains, the numbers in the wave hitting “Peak 65” are impressive:
- 12,000 people a day will be turning 65 as we go into 2024
- In 2024, the U.S. will have more 65-year-olds than ever before
- In 2030, all the Boomers — in fact, 20% of the U.S. population — will be 65 or older
Of course, Boomers are facing some significant challenges when it comes to retirement. Private sector pensions are scarce these days, as we have covered previously. And it doesn’t help that public pensions are substantially underfunded.
We still have Social Security, but there are some problems there as well: it is being relied upon more heavily than intended, and Americans lose as much as $3.4 trillion in income because they claim their benefits too soon.
“Peak 65” retirees can learn important lessons from the first wave of Boomers
We recently conducted a study and found that over 60% of retirees would love to take a mulligan on their retirement planning and do it over. The biggest regrets were saving earlier and saving more.
Additionally, we found that "other ‘would’ve, could’ve, should’ve' reflections include choosing investments that provide a steady stream of income, with 63% reporting they’d like to receive an automatic paycheck from their retirement assets; and planning better for the unexpected like inflation and volatility, with 85% interested in investing in solutions that protect them from losses during market volatility."
Life doesn’t always allow for do-overs, but the good news is that two of the biggest concerns — lifetime income and protection from market losses — can be addressed with protected income strategies.
Annuity Awareness Month: designed to help keep the surge on the right track.
Lincoln has been planning for the ongoing retirements of Boomers with great care, as well as sharing education and insights with financial professional and investors. As my colleague Dan Herr reminded us in a recent Advisor Magazine article, annuities are a powerful planning strategy. As he points out:
- Addressing longevity risk can be a big boost for investor confidence: “Only Social Security, a pension and an annuity can provide the protection of a monthly income that is guaranteed to last your client’s lifetime.”
- Annuities can help keep pace with inflation, the not-so-silent killer. Low inflation has been steadily gnawing at portfolios for decades, but those little nibbles have turned into much larger bites over the past year.
- They can smooth a bumpy ride in the markets, with myriad protection options suitable for a wide range of investors.
- For investors who hope to leave a legacy, annuities can be the cornerstone of savvy tax- and estate-planning.
- National Annuity Awareness Month was started in 2010, and this year, at least 28 states issued a proclamation recognizing the importance of protected lifetime income. Here at Lincoln, we want to encourage you to have this important conversation with your clients, and we would love to support you along the way.
National Annuity Awareness Month was started in 2010, and this year, at least 28 states issued a proclamation recognizing the importance of protected lifetime income. Here at Lincoln, we want to encourage you to have this important conversation with your clients, and we would love to support you along the way.
Partner with us: As always, if you have any questions, please contact your Lincoln representative today at 877-533-0265. And follow us on LinkedIn for regular insights and tips on retirement income planning conversations.
Related: Syncing up Retirement Income With Spending
Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates, including broker-dealer/distributor Lincoln Financial Distributors, Inc., Radnor, PA, and insurance company affiliates The Lincoln National Life Insurance Company, Fort Wayne, IN, and Lincoln Life & Annuity Company of New York, Syracuse, NY. Affiliates are separately responsible for their own financial and contractual obligations.