We are proud to introduce Retirement by the Numbers, which combines our popular Ready! Fire! Aim? studies on participant saving and withdrawal behaviors with our innovative research into retirement household spending patterns—the first in the industry to observe participants’ full lifecycle holistically from saving to spending.
Three key implications from the research:
- How do we help participants save more?
- What is a prudent glide path design when most participants don’t save enough and their lifestyle requirements in retirement have increased?
- How do we help participants decumulate their retirement savings efficiently?
Main takeaways from this year’s study:
Average contribution
rates remain too low
Average contribution:
<10%
Participants start saving at 5% and never reach 10%.
Inflation-adjusted salary has remained flat during this time, which impacts how much people save.
Retirees are spending at higher-than-expected levels
Income replacement at retirement:
>90%
Income replacement at retirement is more than 90%, contradicting the rule of thumb of 70%-80%
More people are staying in their plans after they retire
Participants remaining in the plan 3 years after retiring:
42%
42% of participants remained in the plan three years after retiring—more than double from ten years ago. More participants will need help decumulating their assets.
Source: J.P. Morgan retirement research, 2018-19.
09wo211110145450