How are participants interacting with their defined contribution retirement plans, and what are the implications for target date fund glide path design? For more than two decades, J.P. Morgan Asset Management has closely examined this question, analyzing real-world saving and spending patterns to provide actionable insights into how to help more people achieve the retirement they’ve earned.
Retirement by the Numbers offers a unique view of how participants save, invest and spend throughout their working lives and retirement, leveraging data from the Employee Benefit Research Institute, Retirement LinkSM and de-identified Chase households. This research is designed to help plan sponsors deepen their understanding of realistic participant behaviors and provides a practical lens to assess the type of target date portfolio design best positioned to stand up to the stresses of saving and spending.
Key findings, by the numbers:
85%
of participants never reach the commonly recommended minimum 10% contribution rate.¹
Nearly 1/5
have a plan loan, and almost half carry credit card debt; high revolving debt often coincides with lower contributions and smaller balances.²
81%
of pre-retirement income needs to be replaced, on average, for those reaching a peak salary of $80,000, with 44% coming from savings.³
67%
withdraw their entire account within three years of retiring, though most would likely stay if their plan offered a guaranteed income option.⁴
By understanding the numbers driving retirement outcomes, we can all help increase the odds that participants are able to achieve the replacement income they need to retire securely, when and how they want.