J.P. Morgan Asset Management's recently released 2026 Guide to Retirement lays out real-life spending and saving patterns to help financial advisors, consultants, plan sponsors and participants prepare for spending surprises and improve retirement outcomes.
"This year's findings show that the top concerns for retirees and those preparing for retirement are generating sufficient income, managing spending volatility and maintaining emergency savings," the firm's chief retirement strategist, Michael Conrath, said in a statement.
"As people live longer and the retirement landscape becomes more unpredictable, advisors need practical tools to help clients and participants understand and navigate retirement challenges."
Several themes emerged from this year's edition of the guide:
— Success is based on having a defined savings target and income replacement goal, the guide suggests. Consistent increases in savings rates as small as 1% can significantly enhance retirement readiness and cover nearly nine years of Medicare-related expenses.
— Although many workers expect to retire at 65, the actual median retirement age is 62, often owing to unforeseen circumstances. Retiring early comes with a cost.
— Claiming Social Security at 62 leads to a permanent reduction to 70% of the full benefit, while waiting until 70 increases monthly payments by 24% compared with claiming at full retirement age.
"It's critical for individuals to understand the trade-offs, debunk common myths and consider their personal circumstances so they can make the most informed choices for their retirement," Sharon Carson, a J.P. Morgan Asset Management retirement strategist, said in the statement.
The right account type can help preserve more of one's retirement savings. For example, diversifying across traditional and tax-free Roth accounts and being strategic about Roth conversions can provide flexibility and control over tax bills and Medicare premiums in retirement.
Retirement spending often faces overlooked risks, with some 60% new retirees experiencing significant spending volatility in their first three years. The study notes that households with more guaranteed income spend up to 44% more in retirement, underscoring the importance of dependable income and flexible strategies to manage market volatility and unexpected health care costs.
See the gallery for how much investors at five different ages should have saved for retirement, according to J.P. Morgan Asset Management. The firm provided "checkpoints," based on anonymized household data and proprietary research, that assume investors want to maintain an equivalent lifestyle in retirement. The recommendations take Social Security benefits into account.
The model assumes annual gross savings of 10% in a target date fund, inflation of 2.5%, retirement age of 65, and 35 years in retirement.
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