It’s here: 2024, and the demographic milestone anticipated to have a major impact on retirement plans (and realities) for Americans. As the phrase “Peak 65” implies, the largest number of Americans ever will turn 65 in 2024, with implications for everything from retirement planning, health care, Social Security and more.
Born between 1946 and 1964, Baby Boomers have been steadily headed toward the traditional retirement age of 65. In 2024, deemed Peak 65, “about 12,000 people will turn 65 every day in the next year. That’s about 4.4 million in 2024. And by 2030, all boomers — those born from 1946 through 1964 — will be 65 or older. This means one in every five Americans will have reached the traditional retirement age.” As this large generation ages, life expectancy has increased: “today’s 65-year-old can expect to live at least another 20 years.” Meanwhile, the parallel trend toward fewer children is leading toward a variety of anticipated challenges:
Older adults are projected to outnumber children under age 18 for the first time in U.S. history by 2034….“The mismatch between old and young will have implications across the coming years,” said Dr. Grace Whiting, president and CEO of the National Alliance of Caregivers.“We aren’t having enough children to take care of us in our old age,” she said. “Look at my family: my in-law was one of six children, my husband and I were one of two, and we don’t have kids. Extrapolate that out, and that’s what’s happening nationwide.”
Given the population trends, it’s no wonder that 2024 finds retirement industry data pointing to all kinds of worries about the adequacy of social security benefits, the success of retirement saving, inflation, health care costs and more. Some analysts have been pointing out that the traditional 3-legged stool of retirement planning is broken.Others suggest that despite fears, fees and confusion, perhaps the time has come to take annuities, otherwise known as guaranteed lifetime income, more seriously within company sponsored retirement plans:
Allianz Life and RetireOne say more investment advisor representatives (IAR) are recommending fixed annuities. According to the data, nearly half of IAR respondents refer fixed annuities to clients in need of principal protection—an increase from 2022 and 2021. Nearly half of all respondents say their clients see the value of annuities in their portfolios—adding that for 88%, incorporating guaranteed lifetime income gives their clients the courage to spend confidently in retirement.
First Things First?
This much is certain in 2024: change is coming for company sponsored retirement plans. As investigations and litigation result in ever more significant legal and financial consequences for errors and oversights related to company sponsored retirement plans, fiduciary liability insurance has become a crucial safeguard, offering protection against legal costs, settlements, and potential damages arising from alleged breaches of fiduciary duties.
Colonial offers a simple and affordable way to protect yourself and your business: just opt in below to upgrade your ERISA bond to include Fiduciary Liability insurance. You’ll even receive Cyber Liability insurance at no extra cost. You can choose a 1, 2, or 3-year package.
If you already have an ERISA bond package with Colonial, you can even lock in your rates by upgrading to the 2 or 3 year package.
Protect yourself, your business and your plan for the go forward:
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