How can advisors keep clients on track with their retirement savings? Checkpoints, or approximate goals, are key for advisors to review with their clients as they move through their asset accumulation years, according to the retirement team at J.P. Morgan Asset Management.
In a recent webinar, the team reviewed key points of its latest Guide to Retirement. Among them: Advisors can provide “checkpoints,” based on age and desired spending level in retirement, to ensure clients are on track with their savings.
“It can spark the conversation,” said J.P. Morgan Asset Management Chief Retirement Strategist Katherine Roy of the checkpoint guidance.
The J.P. Morgan team modeled out how much investors at various income levels should have saved at various ages throughout their working lives. The analysis “assumes you would like to maintain an equivalent lifestyle in retirement,” according to J.P. Morgan.
They began with these assumptions:
- Annual gross savings rate: 10%
- Pre-retirement portfolio: 60/40 diversified
- Post-retirement portfolio: 40/60 diversified
- Inflation rate: 2.3%
- Retirement age: Primary earner: 65, Spouse: 63
- Years in retirement: 35
In the gallery above are where retirement savings should be at five different ages, according to the group’s recent calculations.