We’ve Just Entered the Peak 65® Zone

5 minute read

America has entered the “Peak 65 Zone”, a huge moment when more Americans will turn the traditional retirement age of 65 than at any time in our country’s history. So, what’s it like crossing into the “Peak 65 Zone?” When you talk to real-life consumers, they’ll share a range of emotions…everything from excitement about the freedom of their retirement years to fear over making sure their money lasts as long as they do. For many, it’s a combination of both, along with many other feelings that characterize retirement and the years leading up to it.

On the latest episode of “Your Money Map,” host Jean Chatzky sat down with Jason Fichtner, Executive Director of the Alliance for Lifetime Income’s Retirement Income Institute and Chief Economist at the Bipartisan Policy Center, and three consumers, each at different points of their retirement journey, who shared their thoughts on what it feels like to be part of the “Peak 65 Zone,”:

• Mark Emerson, a longtime FedEx employee, who just retired last November at the age of 65. When he left FedEx, he received a lump sum pension, which he put into an annuity. From Mark’s perspective, the biggest benefit of doing this was that if something happened to him, the money would go to his wife, and then to his sons. He works closely with a financial advisor, who he says is easy to understand, and has a 401(k) and IRA in addition to his annuity. Mark has said the retirement process has been “challenging,” especially when it comes to getting signed up for Medicare;
• Milagros “Milly” Smith, a 58-year-old physician assistant, who has set a goal of retiring by age 65. She is a practice manager and chief physician assistant at an urgent care clinic, which her family owns. When she retires, her goal is to spend part of the year in Hawaii, a place where she loves to travel with her husband, children and grandchildren. At that point, when she retires, she expects to have two sources of monthly income from business investments, aside from her 401(k) and IRA. She does work with a financial advisor, but not as much as she’d like to. Milly believes she should “definitely be more in touch with her financial advisor;” and
• Mary Peacock, is 62 and a teacher at a community college. In a perfect world, she’d retire at age 65, but isn’t sure she would be able to. For years, Mary was a single parent, who worked part-time. Only in the last ten years has she had a job that paid enough money where she could start to plan and save for retirement. Mary says when she thinks about retirement, she has “a lot of fear” about the future. She has a 403(b) and a pension. In addition, she works with a financial advisor, but would like to find a new one–and isn’t sure about how to go about doing so. Once she’s able to retire, Mary looks forward to moving closer to her daughter and hopefully, starting a “market garden,” as gardening is one of her passions.

WATCH Your Money Map: Peak 65 Is Here: We’ve Just Entered the Peak 65® Zone

When it comes to retirement, no two stories are alike. But there is one common thread–and that’s with the advent of the Peak 65 Zone, the old way of thinking about retirement no longer works. According to a new research report, The Peak 65® Zone is Here– Creating a New Framework for America’s Retirement Security, by Fichtner, , that’s because the traditional “three-legged stool” of retirement doesn’t exist anymore. Typically, retirees relied on employer pensions, personal savings and Social Security. Unlike older retired Baby Boomers, most Peak 65’ers don’t have pensions to help fill the gap left by Social Security. In fact, Fichtner’s report highlights the fact that about half of households are “at risk” of not having enough money to maintain their standard of living in their later years.

In light of this, according to an Alliance survey, a majority of Peak 65’ers (66%) are worried about having enough money for retirement. Additionally, 79% say they’re concerned about the cost of healthcare in retirement and sadly, only 24% are “very optimistic” about retirement. We often hear that our retirement years are supposed to be some of the best of our lives. How can we do away with the worry and attain income security that helps us enjoy them? As Fichtner’s report outlines, we need to establish a goal that protects up to two-thirds of people’s retirement income. According to him, we’ll get there through a combination of steps, including giving Americans more choices and greater access to protected income solutions, like annuities.

As we continue to move through the Peak 65 Zone, we’ll be highlighting the experiences of these consumers and others across the country. How do they feel about the future? What are they doing to make their money last? And what are their thoughts on being part of this new chapter in America’s retirement landscape? Join us as we listen–and learn from–their stories.