A silver tsunami is washing across our shores, as record numbers of Americans start hitting retirement age, writes Axios' Emily Peck.

• The U.S. isn't ready.

Why it matters: Older Americans are stepping into an unfamiliar, less secure version of retirement.

• 📊 About 45% of Americans will experience retirement funding shortfalls if they retire at 65, per Morningstar.
• 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.

💬 "We kind of took care of the Greatest Generation" in terms of broad planning for a structured retirement, 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.

💡 Reality check: Experts have been warning about a retirement crisis for decades, and we have yet to see one, American Enterprise Institute economist Andrew Biggs tells Axios.

• "The real retirement crisis is on the governmental side," he says, pointing to the Social Security funding gap.

Go deeper.

For decades, people have fretted that America's bedrock retirement income program would run out of money, Axios chief economics correspondent Neil Irwin writes.

• But Social Security's rocky fiscal future is an issue for the here and now.

The big picture: The Social Security retirement fund — the government's pot of money for paying retirees — is set to be depleted in 2033. At that point, recipients would see a steep cut to their monthly checks absent congressional action.

• ⏰ U.S. Senate candidates in next year's midterms could face the looming insolvency at the end of their terms — putting the issue on the ballot just 11 months from now.
• 🔥 "This is a tinderbox issue," Gopi Shah Goda, director of the Retirement Security Project at the Brookings Institution, tells Axios. "It's hard to deal with because it's a long-term problem — but that time is coming."

Zoom out: This predicament has its roots in forces that have been known for decades.

• 📉 There were 3.4 workers — people earning an income and paying into the system — per Social Security beneficiary at the turn of the 21st century. That's down to about 2.7 now and on track to reach 2.3 in a decade.

Reality check: "We have gone 40 years knowing exactly what was coming for us," said AEI's Biggs. "If you want to know where Social Security is today, read the New York Times from 1990."

• The problem is that the solutions are painfully zero-sum and politically unpalatable, with every dollar of benefits maintained for a recipient translating into a tax increase for someone else.

The possible solutions fall into three buckets:

1. 💰 Taxes can be raised.
2. ✂️ Benefits can be cut.
3. ⏲️ The structure of Social Security could be changed to delay the reckoning.

The bottom line: The good news is there is no political appetite for large-scale cuts, and in some form, Social Security will almost certainly be there for you.

• The bad news is that America faces a costly and potentially tempestuous reckoning over how to make that the case.

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More than 20% of the U.S. population will be 65 or older by 2030 — over 71 million people.

• By 2100, 106 million people, nearly 30% of the U.S. population, will be over 65.

Pensions as a complement to Social Security were left for dead. But their obituary might've been written too early, Axios business reporter Nathan Bomey reports.

• Why it matters: Defined-benefit pensions have plummeted in recent decades as employers shifted more investment risk to their workers.

Yes, but: United Auto Workers (UAW) president Shawn Fain, one of America's most prominent and powerful union leaders, plans to make a fight to restore traditional pensions a cornerstone of the next collective bargaining effort with GM, Ford and Stellantis.

• 🥊 "Our fight's not even close to being finished," Fain told workers in a town hall in September.
• 🏆 The more Social Security comes under stress, the more important that fight is going to be.

By the numbers: In 1980, 46% of private-sector workers were covered by a pension plan, according to the Georgetown University Law Center.

• By 2023, that was down to 11%, according to the Pension Rights Center.

The intrigue: IBM "shocked the retirement world" in late 2023 by relaunching a version of a defined-benefit pension, according to the National Institute on Retirement Security.

• It's a "cash balance plan," in which the employee makes contributions and the employer guarantees a certain return.
• "If the UAW is successful in actually getting something called a pension, it's going to look like one of those," said Anthony Randazzo, executive director of the Equable Institute.

Go deeper.

While blue-collar workers try to reclaim pensions, young Americans are increasingly planning for retirement by investing in the stock market while putting off homeownership, Axios markets reporter Madison Mills writes.

By the numbers: About a third of 25-year-olds have investment accounts today, a sixfold increase from a decade ago.

• 🧮 Financial assets and investments are "taking a bigger share" of the wealth picture for young people, says George Eckerd, research director at JPMorgan Chase Institute.

Zoom in: While stocks can be volatile, housing values have (mostly) remained strong.

• 🏡 Homeownership accounts for nearly half of Americans' wealth, and a home is the average American's most valuable asset.

Reality check: The barriers to homeownership keep rising, while investing has never been easier or cheaper.

• Trading doesn't require credit checks, brokers, paperwork or a huge down payment — just a few clicks from your phone and a few hundred dollars.

What to watch: It may not be that young people have abandoned housing as a wealth builder; it's just unaffordable right now, Eckerd says.

• That could change as interest rates fall.

Go deeper.

AI can democratize sophisticated retirement planning and reduce the need for a high-paid planner, Axios tech editor Megan Morrone writes.

How it works: Investors at any stage of their career can use AI for scenario modeling, identify savings gaps, tax optimization, Roth conversions and "what-if" questions like, "What if I retire at 55 versus 65?"

• Financial planners say it can free them from busywork, allowing them to spend more time talking to clients.

Reality check: Those same planners warn that using it on your own can be risky.

• 💔 AI is particularly unsuited for handling complex life events — divorce, inheritance or emotional questions about money.
• 🤖 Be careful about turning over personal info to bots.

Go deeper.

Retirement seems scariest before you take the leap, experts say. But there are things workers can do now to prepare and feel less anxious, Emily Peck reports.

🔢 Take a look at the numbers. Make a budget and figure out what you need. Take everything into account — not just your retirement account, but housing wealth too, if you have it.

💵 Save money. It's obvious but worth repeating. Take advantage of those 401(k)s and any kind of employer match. If you're older and need to catch up, increase your contribution if you can.

• If you don't have a workplace plan, you can set up a plan for yourself. There are options like a SEP-IRA or solo 401(k), says Diane Harris, deputy editor of Kiplinger Personal Finance magazine.

💸 Prioritize paying down high-interest debt. This is especially important for young workers.

🏥 Take care of yourself. Medical expenses are one of the biggest expenses in retirement.

⌚️ Delay. Most experts say to keep working if you can.

• When you continue your job past full retirement age, your Social Security benefit increases by about 7% annually when you do retire. The annual increase stops at age 70.

The bottom line: Money's important. But well-being isn't all about money.

• Go deeper.