J.P. Morgan Asset Management Releases 2025 Guide to Retirement

Rhea-AI Summary

J.P. Morgan Asset Management has released its 13th annual Guide to Retirement for 2025, offering comprehensive insights into retirement planning. The guide focuses on four key themes:

1. Planning for longer life expectancy, with over 50% of healthy female non-smokers expected to live past 90

2. The importance of long-term investment strategy, highlighting how missing the 10 best market days over 20 years could reduce portfolio returns by almost 50%

3. Social Security optimization, showing that delaying benefits until age 70 can increase payments by 24% compared to claiming at full retirement age

4. Retirement income planning, emphasizing how guaranteed income sources may lead to increased retirement spending confidence

The guide includes new sections on Social Security and Health, utilizing anonymized household data and proprietary research to help advisors and individuals make informed retirement planning decisions.

Positive

• New comprehensive retirement planning guide released with proprietary research
• Enhanced focus on Social Security optimization strategies
• Addition of new Social Security/Health section
• Expanded tools and resources for financial advisors

Negative

• None.

13^th edition of Guide explores key themes that will impact retirement planning this year, including Social Security and guaranteed income

NEW YORK, March 4, 2025 /PRNewswire/ -- J.P. Morgan Asset Management today released the 13th edition of its annual Guide to Retirement. This year's Guide offers a fresh perspective on the evolving landscape of retirement planning, focusing on key themes such as Social Security, guaranteed income, and the importance of long-term investment strategies. It also includes a new section on Social Security/Health, highlighting the important role these topics play in shaping retirement planning discussions. By utilizing anonymized household data and proprietary research, the Guide provides actionable insights to help advisors, consultants, defined contribution plan participants and sponsors navigate unforeseen retirement roadblocks and improve retirement outcomes.

"Retirement means different things to different people, and planning for it involves a multitude of decisions which can feel daunting or overwhelming. However, the core principles of a secure retirement are approachable and within reach. It's more important than ever to empower individuals with the tools and knowledge they need to secure their retirement future," said Michael Conrath, Chief Retirement Strategist at J.P. Morgan Asset Management. "The 2025 Guide to Retirement offers a comprehensive look at how retirement planning is evolving. It enables advisors and their clients to make informed decisions that align with their long-term goals, giving them the confidence to achieve their saving and spending targets."

Sharon Carson, J.P. Morgan Asset Management Retirement Strategist, added, "The ability to simplify the answers to the most common retirement planning questions is crucial in today's rapidly evolving financial landscape. With the Guide to Retirement, our goal is to shed light on the most salient retirement issues facing U.S. retirees, such as why it is important to invest over the long-term and what they should consider regarding their Social Security benefits. Our proprietary research can help individuals at all life stages enhance their retirement plans and financial security."

Below are four key themes featured in the 2025 Guide to Retirement:

Theme #1 - Don't plan to be average – know your savings goal. It is important to plan for a longer life expectancy, which could mean 35 years in retirement. More than half of female non-smokers in excellent health will pass age 90, and 4 in 10 healthy non-smoking men are expected to do the same. Given this, understanding your savings target and investing a portion of your retirement portfolio for growth is important to maintain purchasing power over time.

Theme #2 - Savings alone won't fund retirement – invest for the long-term. Emotional reactions to market declines can harm portfolios since the best days are likely to occur close to the worst days. Missing the 10 best days of the market over the past 20 years would have reduced a portfolio's annualized return by almost 50%, missing the top 40 days would have a negative annualized return on the original investment. Staying invested with a diversified long-term investment strategy tends to produce a better retirement outcome.

Theme #3 - Know what to expect from Social Security. Our research indicates that waiting until age 70 to claim Social Security can boost benefit checks by 24% compared to claiming at full retirement age for those born in 1960 or later. On the other hand, starting benefits early at age 62 means receiving only 70% of the full retirement amount, resulting in a permanent reduction. It's crucial to understand the benefits and tradeoffs of claiming decisions.

Theme #4 - Adopt a retirement income plan that gives you confidence to spend. More guaranteed income may equal less fear of spending. A typical household might fund their retirement from a mix of investment accounts plus guaranteed income sources. Our research shows that having more guaranteed income may result in increased spending in retirement, for households with similar levels of total retirement wealth. This may be because people feel comfortable spending Social Security pensions and annuities while they are more reluctant to spend the capital of their portfolio.

J.P. Morgan Asset Management helps financial advisors serve their individual clients, DC plan sponsors and plan participants by offering industry-leading insights such as the Guide to Retirement, Guide to the Markets, Long-Term Capital Market Assumptions and spending and saving research in collaboration with the Employee Benefit Research Institute (EBRI). The firm also provides a one-stop-shop of digital tools and resources including Target Date Compass® and Core Menu Evaluator^SM.

To view the full 2025 Guide to Retirement, click here.

About J.P. Morgan Asset Management

J.P. Morgan Asset Management, with assets under management of $3.6 trillion (as of 12/31/2024), is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. For more information, visit: www.jpmorgan.com/am

About JPMorgan Chase

JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America ("U.S."), with operations worldwide. JPMorganChase had $4.0 trillion in assets and $345 billion in stockholders' equity as of 12/31/2024. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world's most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

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SOURCE J.P. Morgan Asset Management

FAQ

What are the key findings in JPM's 2025 Guide to Retirement about Social Security benefits?

The guide reveals that waiting until age 70 to claim Social Security can increase benefits by 24% compared to full retirement age, while claiming at 62 reduces benefits to 70% of the full amount.

How does missing the best market days impact retirement portfolios according to JPM's 2025 research?

Missing the top 10 market days over 20 years could reduce portfolio returns by almost 50%, while missing the top 40 days would result in negative returns on the original investment.

What does JPM's 2025 Guide reveal about life expectancy in retirement planning?

Over 50% of female non-smokers in excellent health are expected to live past 90, and 40% of healthy non-smoking men will do the same, suggesting a need to plan for up to 35 years in retirement.

How does guaranteed income affect retirement spending according to JPM's 2025 research?

Research shows households with more guaranteed income sources tend to spend more in retirement compared to those with similar wealth levels but less guaranteed income.