Five retirement planning tips to share with clients now

Michael Conrath, Chief Retirement Strategist, recommends using annual portfolio reviews to help clients gauge the likelihood of being able to afford their desired lifestyle in retirement: “This is a great time to evaluate if adjustments are needed, based on your client’s age, savings and spending goals,” he advises.

Share these five planning tips with clients to help keep their retirement plans on track in 2025: 

1. Do the math

Too few Americans calculate what it will take to maintain their current lifestyle in retirement. Help your clients fill in the blanks by showing them:

• An appropriate income replacement rate—one that demonstrates some spending categories in retirement—notably, healthcare—don’t decline as much as people anticipate
• Estimates of how much Social Security is likely to cover
• Reasonable assumptions about return rates and inflation over time
• Adjustments they’ll need to make to keep or get their retirement plans on track

2. Plan for fluctuations in spending 

J.P. Morgan research reveals—six in 10 retirees experience spending fluctuations of 20% for each of the first three years of their retirement.¹ Moreover, half of retirees between ages 75 and 80 continue to experience this spending volatility from year to year.

Planning strategies that include guaranteed lifetime income options can help clients prepare for sequence of return risk as they near retirement as well as provide funding for stable expenses as they age.

3. Consolidate assets

Many clients think they are diversifying when they spread their wealth across multiple institutions. But, in practice, this tactic may provide less transparency, require more effort and coordination, and lead to duplicative or conflicting efforts.

Explain to clients that consolidating investment accounts under a single advisor can provide a fuller picture of their finances and allow more comprehensive and targeted retirement-income planning. Further, consolidation simplifies Required Minimum Distribution (RMDs) calculations, streamlines recordkeeping and makes beneficiary management easier.

4. Diversify sources of retirement income

Individuals often hold much of their retirement wealth in tax-deferred vehicles, typically traditional 401(k) plans. While this can be a powerful savings option, the tradeoff is that distributions generally come with income-tax consequences.

Having a mix of taxable, tax-deferred and tax-free (such as Roth) accounts can give retirees more flexibility and control, both over their retirement income sources and the tax impact on distributions.

This may be a good time to discuss diversification. Some practitioners think the relatively low tax rates in the U.S. will continue under the new administration—providing a timely opportunity for clients to shift tax-deferred assets to tax-free Roth accounts.

5. Stay invested (and stay calm)

Retirement planning is generally a long-term journey that requires diversifying beyond cash. However, during periods of volatility, or when equity valuations appear high relative to history, clients may be tempted to time the markets.

Advisors are well positioned to help clients understand that market timing is extremely difficult, even for savvy investors, because it’s not just about being right once—as in knowing when to sell. A market-timing investor must be right twice—knowing when to sell and when to buy back in.

Exhibit 1 (below) illustrates that the worst days in the market are often followed by the best days—and missing out on those days’ gains can have dire consequences for a portfolio.

If a client’s long-term goals have not changed, helping them resist the short-term urge to abandon equities in favor of cash can lead to better retirement outcomes.

For more information, please see the J.P. Morgan Guide to Retirement.

¹“Three New Spending Surprises,” J.P. Morgan Asset Management, 2024.

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