A Stark Contrast in 'Peak 65' Baby Boomers' Retirement Savings Pictures

In 2024, the U.S. attained a momentous milestone as a country. That was the year that we reached what’s been dubbed “Peak 65,” referring to the youngest, largest, and final group of retiring Baby Boomers. Indeed, it may just be the largest influx of retirees in history as more than 4 million Americans will reach age 65 each year from 2024 until 2027. For you math-minded folks, that’s an average of 11,000 Americans reaching their 65th birthday every day.

There is a dichotomous financial picture being painted of the Baby Boomers, however. Despite some ups and downs, data reveals that this generation was fortunate enough to be born and live during a time of relative prosperity in our nation. As a result, many amassed substantial wealth. Yet a large percentage of Baby Boomers lack sufficient retirement savings to afford a financially secure future.

What will this contrasting financial picture mean for retirees and the future of the senior living and care industry, as well as for our larger society?

The wealthy Baby Boomer

Data reported late last year in Money reveals that, as a generation, the Baby Boomers, born between 1946 and 1964, are the wealthiest generation of Americans ever. Based on data from financial firm Allianz, the article notes the generation’s wealth “has less to do with financial prudence and more to do with the luck of the draw.”

As the Allianz researchers pointed out, the Baby Boomers benefitted from “a unique historical situation — strong economic growth, affordable housing markets, and booming equity markets” which coincided for a large portion of their adult lives, enabling them to successfully (or serendipitously?) build up sizable retirement nest eggs.

The Money article points to Federal Reserve data from June 2024, which reveals that, as a generational group, American Baby Boomers had amassed $80 trillion of wealth — primarily in the form of stocks and real estate. “That’s more than half of all household wealth in the nation, despite boomers only making up about 20% of the U.S. population,” the article notes.

The financially insecure Peak 65 Baby Boomer

There is another side to the story of the Baby Boomer generation’s financial picture, however. A substantial percentage of older adults lack sufficient savings to cover their living and potential long-term care expenses once they retire. And in fact, many have no retirement savings.

Credit Karma conducted a 2023 survey that showed that more than 1 in 4 (27%) Americans age 59 or older have nothing saved for retirement. A similar 2024 study conducted by AARP found that 1 in 5 Americans age 50 and older have zero retirement savings.

Yet another 2024 study from the nonprofit Alliance for Lifetime Income (ALI) Retirement Income Institute shows that more than half (52.5%) of the “Peak 65” group of Baby Boomers who will turn 65 by 2030 have less than $250,000 in assets — including savings and real estate. Another 14.6% of this age demographic have $500,000 or less in assets, which is generally not considered enough to maintain most people’s standard of living.

The ALI study noted that “Based on their assets and their likelihood of living up to 20 or more years in retirement, two-thirds of Peak [65] Boomers will be challenged to maintain their lifestyles in retirement.” With so little saved, ALI researchers project that it is likely that a large portion of the Peak 65 group will outlive their savings and thus have to rely mainly on Social Security for income.

Demographic disparities in retirement savings

Natixis research shows the median retirement savings for Baby Boomers is just $120,000. Meanwhile, ALI researchers note that the median retirement savings for the Peak 65 group of Baby Boomers is $225,000. However, drilling down further into the ALI data on the large percentage who lack sufficient retirement savings, we see there are stark differences based on gender, ethnicity, and education.

The median retirement savings for men is $269,000 versus just $185,000 for women.
For whites, the median savings is $299,000 compared to only $123,000 for Hispanics and $49,000 for Blacks.
Looking at education, the median retirement savings for college graduates is $591,000 whereas those with only a high school diploma have just $75,000 saved, and those who didn’t graduate from high school have saved a median of only $7,000.

What about pension plans?

How do all of these Peak 65 soon-to-be retirees with insufficient savings plan to support themselves during retirement? The good news is the ALI study found that nearly a quarter (24%) of the Peak 65 group does have a defined benefit pension. Around half of those pensions come from private employers and the other roughly half comes from state and local governments or the military (also called public employers).

But there are disparities between the private and public pension plans. According to 2022 data from the nonprofit Pension Rights Center, the median annual benefit for government pensions was $25,980, and the median military pension was $24,130. That’s more than twice as much as the median annual benefit of private pensions, which was just $11,040 as of 2022.

For those Peak 65 Baby Boomers banking on Social Security

What about those people who are counting on their Social Security to cover their senior living and care expenses? On average, Social Security is intended to replace about 40% of a person’s annual pre-retirement income, according to the Social Security Administration (SSA). But as of January 2025, the estimated average monthly Social Security retirement benefit was just $1,976. That’s less than $24,000 per year. This presents several issues.

First, a 2023 study from Natixis Center for Investor Insight looked at different generations’ expectations of Social Security. For instance, only about half of those in the Millennial generation (born between 1981 and 1996) believe Social Security will factor heavily into their retirement savings plans. But approximately 9 out of 10 in the Baby Boomer generation are counting on Social Security to help fund their retirements, according to Natixis.

Additionally, analysis by ALI of data from the University of Michigan Health and Retirement Study found that one-third of the Peak 65 Baby Boomers plan to rely on Social Security benefits for at least 90% of their retirement income when they reach age 70.

However, according to the SSA’s own actuarial analysis, the Social Security trust fund is expected to run out of money by 2035 — that’s just 10 years from now. That depletion could lead to across-the-board benefits cuts (that is, unless Congress does something to rectify this issue in the meantime, of course). Translation: Many Peak 65ers may not get as much from Social Security as they are counting on.

How much money do you need for a secure retirement?

Natixis research shows that the Baby Boomer generation estimates that they will need $1.1 million for retirement. Retirement savings experts typically say $1 to 1.5 million is a good target but disagree on what the ideal amount is. Some advise saving 80 to 90% of your annual pre-retirement income; others suggest saving 10 to 12 times your final pre-retirement salary should be the goal.

But if the actual median retirement savings is $120,000 for the Baby Boomer generation, as Natixis found, the typical Peak 65er would need to start saving $196,000 annually in order to retire in five years with sufficient savings. And the rather shocking reality is that, according to Credit Karma research, roughly 1 in 5 or 20% of people over age 59 don’t even have a retirement savings account.

But it’s also worth noting that the $1.1 million figure is just an estimate. Obviously, some people will need less than that, depending on their senior living and lifestyle choices, as well as how long they live. But others may end up needing much more.

As just one factor, consider the cost of long-term care. According to Genworth data, the 2025 average cost of a year in an assisted living community is $72,924, and a nursing home will average $131,583. Looking at projected costs for 2030, that same care will cost $84,539 and $152,540, respectively. Going out 10 years, those numbers jump to $98,004 and $176,836 respectively. And that’s just for one person, for one year of care.

And if you think remaining in your home will be a substantial cost-savings should you need care, consider these numbers from Genworth: A home health aide, working just 44 hours per week (so not around the clock or every day) runs about $80,126 per year currently. In five years, that amount jumps to $92,888 annually and will likely cost $107,682 annually by 2035.

>> Related: What Will My Long-Term Care Cost?

Systemic and societal solutions for Peak 65 are imperative

It’s easy to see how requiring any type of long-term care could quickly deplete one’s retirement savings. Of course, no one can predict the future, but that’s why there are so many unknowns when it comes to retirement and the necessary savings.

What is certain, however, is that we as a nation are about to experience the retirement of the largest cohort in our history with the Peak 65 Baby Boomers. Given the disparities between this group’s financial readiness for retirement, the senior living and care industry — and we as a society — must seek innovative, more economical solutions to address the needs of those lacking sufficient savings. This includes both housing and care options that allow them to age safely and with dignity.

For those who do have adequate retirement savings, the question for the senior living industry is: What will make them willing to spend it? What are the lifestyle options, services, and amenities that this Peak 65 Baby Boomer cohort will find appealing enough to part with some or most of their money? Indeed, the long-term viability of the senior living industry relies on finding the answer to this question.

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