A silver tsunami is washing across our shores, as record numbers of Americans start hitting retirement age. The U.S. isn't ready.
Why it matters: Older Americans are living longer than any previous generation and stepping into an unfamiliar, less secure version of retirement.
- Many of them haven't caught up to this new reality, and neither have policymakers.
- About 45% of Americans will experience retirement-funding shortfalls if they retire at 65, according to Morningstar's projections from last year.
- The full retirement age, which has gradually increased, is now steady at 67.
The big picture: Retirees on fixed incomes face an ever-rising cost of living.
- Out-of-pocket medical expenses are escalating, the cost of in-home care is growing more than three times faster than inflation, and an increasing share of the elderly are spending more than a third of their income on real estate too.
By the numbers: Pensions once provided retirees with a regular, expected source of income for as long as they lived. They were a boon for the Silent Generation and older boomers. Now they are vanishing.
- Only about 14% of Generation X (those ages 45-60) have a pension plan, according to the National Institute on Retirement Security.
"We kind of took care of the Greatest Generation," Teresa Ghilarducci, an economist at the New School for Social Research and leading retirement researcher, tells Axios. But the younger generations have had much less support.
- On paper, retirement accounts might make older Americans appear wealthy. There are an increasing number of 401(k) millionaires, after all.
- But with costs and debts rising — and lifespans lengthening — older Americans might run out of money, she says, or be forced to severely cut back spending. "We have shades of the retirement crisis right now."
Between the lines: There's massive inequality when it comes to retirement readiness — workers earning more than $150,000 a year contribute nearly 13 times more toward retirement than those earning under $50,000, a report out in November found.
- It's easy to say that many elderly people will simply work longer, but that's not always possible.
Threat level: There are steps people can take to get on track for retirement, but the question looming over everything is whether future retirees will get full Social Security benefits — not a sure thing, as Axios' Kelly Tyko reports.
- About 56 million Americans age 65 and older receive Social Security benefits, per federal data.
- The lowest-earning workers rely on it. Social Security is the primary source of income for retirees with household incomes below $50,000, according to Transamerica's 2025 retirement survey.
- "A cut of 20% to 25% in Social Security benefits would have a devastating impact on retirees who rely heavily or solely on those payments," said Kristi Martin Rodriguez, who leads the Nationwide Retirement Institute. "61% of current recipients say missing even half of a payment would leave them unable to survive financially."
Reality check: Experts have been warning about a retirement crisis for decades, and we have yet to see one, Andrew Biggs, an economist at the American Enterprise Institute, tells Axios.
- "The real retirement crisis is on the governmental side," he says, pointing to the Social Security funding gaps, which are just a few years away.
- People delaying retirement as long as possible could help address these gaps.
The bottom line: The future of retirement in the U.S. looks murky.
