Investor Education | 9 Key Things to Know if Turning 65 This Year.
Four million Baby Boomers will turn 65 in 2024 — the largest number in U.S. history. By this summer, 12,000 people born in 1959 are projected to reach this milestone every day, a phenomenon referred to by some as Peak 65.
1. A Wave of Retirees
America’s older population increased 1,000% between 1920 and 2020, with one in six people now 65 or older.
With more people leaving the workforce and requiring care-giving, the aging of this population will affect everything from the ability to maintain Social Security funding to investments, taxes, and health care resources. It also requires funding for better roads, emergency services, senior centers, and more. The country is already experiencing shortages in nursing home staff and home caregivers, something only expected to worsen.
2. The Senior Moment
When did 65 become the entry into senior citizenship? Part of the answer lies in the creation of Social Security in 1935, when the average life expectancy was just under 60 and people were suffering through the Great Depression. Germany had set the stage when it became the first country in the world to adopt an old-age social insurance program in 1889, initially setting the retirement age at 70, lowering the age to 65 in 1916.
The U.S. government’s Committee on Economic Security, which designed Social Security, noted that retirement ages in the 30 then-existing state pension systems and the few private pension systems either used 65 or 70 as the retirement age. Lawmakers then settled on 65 as the U.S. retirement age. It stayed that way until Congress overhauled the system in 1983 and gradually raised the full retirement age to 67 for those born in 1960 or later.
3. Average Retirement Age
It’s not like a lot of people are actually waiting around for their 67th birthdays before retiring. According to Gallup, the average age people retire has been going up in the U.S., but it’s not yet even reached 65. In 1991, the average adult reported retiring at age 57. It’s now 61.
4. Scammers Have You in Their Sights
We’ve all heard about the fake grandchild calls where the con artist poses as your grandson or granddaughter and asks for financial help. Moreover, the FBI reports that in 2021, more than 92,000 people age 60 and older were scammed online to the tune of nearly $1.7 billion, more than any other age group.
5. Ageism is Real
AARP offers help to people already on the job and those looking for a job after 65, including courses in how to avoid discrimination. If you believe you have been discriminated against due to your age, you can file a complaint with the Equal Employment Opportunity Commission. However, consider going through your company’s grievance process first. Keep thorough records of all alleged discrimination.
6. Plan to Take More Drugs
People 65 and older take prescribed medications more frequently than any other U.S. age group. The most commonly used medications among the 60-to-79 age group are lipid-lowering drugs, anti-diabetic agents and beta blockers. But taking too many drugs can lead to safety concerns, carrying dangers such as increased drug interactions and falling and frailty among patients. It can also lead to something known as drug-disease interactions, in which a medication prescribed to treat one condition worsens another or causes a new one.
7. You’re Not Imagining All of Those New Aches and Pains
Among the changes to expect, are stiffening blood vessels, weakening bones, structural changes in the large intestine and bladder, and possible minor effects on your thinking skills and your ability to multi-task because of the aging of your brain. You are more likely at 65 or over — and especially women — to develop one or more chronic conditions, such as asthma, cancer and arthritis.
8. There Are Plenty of Perks
Most major grocery store chains offer senior discount days, and tons of restaurants offer early bird specials for older adults. Chili’s, Red Lobster, Tim Hortons, and Panera Bread have membership rewards programs for people 65 and older, so you can earn free food and meal discounts. Amtrak offers 10% discounts on most fares when you turn 65.
9. You Even Get a Break on Your Income Taxes
You get a higher standard tax deduction from the Internal Revenue Service, just for starters. The additional 2023 standard deduction is $1,850 for single filers. When you file your taxes next year for 2024, the added deduction will be $1,950. And some states offer tax exemptions for people 65 and over. Maryland, for example, offers an additional $1,000 exemption on its state return for being 65 or older.
If you have a dependent 65 or older, you can get an extra exemption of up to $3,200. Most states offer property tax relief programs for older adults, but you may need to meet income requirements.
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Investment Consultant
Tam Hubert, CFP®, CFA
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Kristi Remus
