Retired Couple Embraces Changing Retirement Landscape: Insights from the 2024 PRIP Study
In today’s ever-changing retirement landscape, more and more retirees are finding themselves living with extended family members. The recent findings from the Alliance for Lifetime Income’s 2024 Protected Retirement Income and Planning (PRIP) annual report shed light on the financial behaviors and attitudes of Americans aged 61 to 65, also known as Peak 65 consumers.
The study reveals that half of Americans in this age group have already retired and begun claiming Social Security benefits. However, a significant portion of these retirees are still providing financial support to their adult children and extended family members, highlighting the financial pressures they continue to face.
One of the most striking disparities uncovered in the report is the difference in retirement savings among Peak 65 consumers. While some individuals have substantial assets, over half possess investable household assets of less than $100,000. This financial insecurity is reflected in the emotional responses of these retirees, with a mix of worry, confidence, uncertainty, and optimism about their financial future.
Early retirement trends are also prevalent among Peak 65 consumers, with health issues and job dissatisfaction being primary reasons for early retirement. The data shows that 51% of individuals in this age group have already retired, with the average retirement age being 57.7. Those still working plan to retire at an average age of 67.1.
Furthermore, the study highlights the growing financial burdens on the ‘sandwich’ generation, with many Peak 65 consumers providing financial support to adult relatives. This additional financial strain impacts their retirement savings and income, leading to a pessimistic outlook on their financial longevity.
In light of these challenges, Jean Statler, CEO of the Alliance for Lifetime Income, emphasizes the importance of annuities in securing a stable retirement. With the median income for annuity owners in 2022 being around $76,000, annuities play a crucial role in providing financial certainty for retirees.
The findings from the 2024 PRIP study underscore the urgent need for financial advisors to educate clients about the benefits of annuities and other strategies to ensure a secure and comfortable retirement. With two-thirds of Baby Boomers turning 65 between 2024 and 2030 not financially prepared for retirement, proactive retirement planning and secure income solutions are more important than ever.
For financial advisors, these insights provide a critical understanding of the challenges and opportunities faced by their clients in the Peak 65 demographic. By addressing these challenges head-on and implementing secure income solutions, retirees can enjoy a relaxing retirement with their extended family members.
