Old bills are not removed from circulation by serial number, they are removed based on condition. Banks sort out the "mutilated" currency and return it as such. Then it is accounted for and destroyed at the Federal Reserve (or one of it's branches). If old currency is redeemed at the bank and no tellers are interested in it, then it will be passed out if it is in good enough condition.
Many years ago I got 125 $1 silver certificates at a bank just because I asked if they had any old bills. Someone had brought them in the previous day. I asked them what they were going to do with them and they told me that they were going to go through them, sort out any "mute" bills and pass out the rest to customers, until I asked for them. Only two years ago, I asked for some $2 bills at my local bank and the teller got out a fresh strap. I jokingly asked if she ever got any red seals and she said rarely. Then she looked through the bundle and there were four in it. I got those. They were all 1928s. So they are still out there and they will be recirculated as long as they are in good enough condition.
Scott