Some Very Cool Retirement Charts

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I came across some very cool retirement charts in this Guide To Retirement from JP Morgan and found them fascinating.  Perhaps it’s due to the two years I spent in a strategy role making charts, but I’ve always found charts a powerful means (if done well) to share information in an easy to digest manner.  I consider the JP Morgan guide a gold mine of great retirement charts.

So, today we’ll be looking at pictures.  I hope you find them as fascinating as I did.

Today, a bunch of very cool retirement charts from J.P. Morgan. Not too many words in today's post, but a lot of cool charts... Click To Tweet

Some Very Cool Retirement Charts

I’ve never come across the JP Morgan Guide to Retirement before, but I’m glad I found their 2020 edition.  I hope you enjoy these very cool retirement charts as much as I did. 

Click on this link to view all of the charts in the original JPM study, I included just a few of my favorites below.


1) Your Level of Control over retirement variables


2) Life Expectancy


3. Lots of Older Folks Still Working


4.  68% of Folks Expect to work until age 65, only 28% actually do.


5.  Savings Rates Required to Retire at age 65


6.  Spending Declines With Age


7. Safe Withdrawal Rates vs. Asset Allocation


8. The Sequence of Return Risk is real 


9.  Private Health Insurance is Expensive


10.  Long Term Care Probabilities


11.  The Bucket Strategy


Conclusion

I told you they were some cool retirement charts, right?

Your Turn:  Which one was your favorite, and why?  Did you learn anything?  Let’s chat….

21 comments

  1. My favorite graph was the declining average spend as we advance in years. The traditional advice is that healthcare increases absorb the other decreases. That was never my observation taking care of my parents.

    1. I was intrigued by Slide #6, also. Certainly counter-intuitive that spending drops by $30k over age 75. I’ve always assumed a “Smile Curve”, with spending increasing in Go-Go years (activities) and No-Go years (health care), but decreasing in Slow-Go. That’s the way we’ve charted our spending in our Retirement Cash Flow models through age 95. Time will tell…

  2. I like the last one. It sounds like your strategy, very nicely visually laid out. I always wondered what your sources were.

    Thanks for sharing these.

  3. The one that most stands out to me is how senior spending actually declines with age . Of course that’s rational but contrary to the current Monte Carlo models. While inflation will rise it does not treat everyone the same . Seniors in they’re own homes , paid off, will not be impacted the same as younger folks. Plus you just don’t spend as much unless you need care.

      1. Declining average senior spending as we age has been known about for a long time.
        The key word in the sentence is “average”.
        By definition, this average will contain a proportion of households whose spending increases, another proportion whose expenditure remains broadly constant and the balance where expenditure decreases. Furthermore, some senior households may spend less as they age due to their particular circumstances – ie they would like to spend more but just cannot afford to spend anymore; whereas in other senior households, spending may increase as they age as they realise they have been under-spending for years.

        That is, there are quite a lot of factors rolled into the average view.

        Another way to think of this is: the average human has less than two legs but most have precisely two.

        Some further thoughts and links to two of the best known reference sources on senior spending are given at http://www.theretirementcafe.com/2015/05/retirement-expenditures-and-costs-of.html

  4. Thanks Fritz. I share your affinity for a well made chart. You must have been a high-priced chart maker in your work.
    An item that is interesting to me is the chart “…Duration of Need for Long Term Care.” 0-90 days is 53% for men. Beyond 90 days it drops off sharply to > 18%. To me this chart displays the power of incentives. Medicare does not pay for LTC needs beyond 90 days. “Somebody else” (Read us) is paying for your care between 0-90 days. After 90 days of care, it’s out of your pocket.
    Also for a daily dose of interesting charts follow the Twitter feed for “Visual Capitalist.”
    Bill

    1. #ChartNerdsUnite

      I worked in Strategy back in the late 90’s, so I was pretty cheap back then. Wink.

      I agree that the Slide #10 is interesting. Add the <1 year data, and it says 71% of men need care for a year or less (53% + 18%). Certainly seems to support the logic of considering self-insurance for LTC risks.

      RE: Visual Capitalist, I just signed up for that daily email a few weeks ago. Not THOSE folks know how to make some awesome charts! Thanks for sharing the tip, I agree it's a great resource for our fellow Chart Nerds.

  5. Hi Fritz,

    Thanks for sharing!
    JPM Guide Page 25 and your referenced chart #8. Not mentioned but I assume both blue and green curves have a 40/60 AA.

    Zac

  6. John touches on this above – I’ve long been intrigued by studies that support that spending declines with age (not accounting for potential health care costs in later years). That passes the smell test and via conversations with “older” retirees, seems legitimate. But it doesn’t seem to be universally adopted by the planning committee, nor built into most retirement planning tools (even as an option). I was glad to see it on your summary. Keep up the good work Fritz!

  7. LTC Insurance – Last time I looked, insurance is coverage for large, infrequent events. But the need for LTC is almost a sure thing, so it is not really insurance, but it is a monthly, invoice driven savings plan with all of the extra-ordinary insurance fees. Now some people need the monthly bill while others are quite capable of being self disciplined. In our household, self insurance is the way to go.

  8. Gotta love the graphs Fritz and thank you for sharing!

    The graph that most surprised me was the “Older Americans in the Workforce”. The data reflects folks want to keep working as opposed to need to work. Statistically, over half of Americans have inadequate savings which should more heavily weight the “need to”.

    I’m not sure if this reflects full-time employment or also includes part-time work. There certainly is a growing trend for retirees to re-enter the market either to stay active and involved or because these workers enjoy their jobs. I know several friends who got part-time jobs doing something they enjoy to earn extra money for fun things.

  9. The LTC insurance is a tricky deal. My experience with my own parents, is that when we finally need help, we are not long for the world, so hiring a temporary person to help is the best way. If however, you have a long lingering illness it is another story.

  10. Very nice! I like the chart of replacement rate by current income. I’ve never seen something like that before, and it seems like a good “reasonableness check” on my own plans (because it’s pretty close!).

  11. Fritz,
    Great find! I downloaded the entire JP booklet and it contains terrific information.

    The Exhibits I found most useful were pages 33, 49, and 50 as these pages specify Tax Brackets, Medicare Surcharge, and Roth income phase-out eligibility. For those that have large IRA balances this is a GREAT year to consider IRA conversions to a Roth however one should keep in mind potential additional Medicare surcharges, tax implications (ie tax brackets) and Roth phaseout income ranges for direct contribution eligibility.

  12. My favorite graph was the “Major Reasons Why People Work in Retirement.” I assumed it was mainly going to be because people needed money and I was pleasantly surprised to see that it was because people wanted to stay active and involved. The human spirit lives–even in advanced age. Thanks for the graphs, my friend. Very thought-provoking. Cheers.

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