JPMorgan Studied 250,000+ Retirees. Here's Their 3 SHOCKING Surprise

About this video

• Video Title: JPMorgan Studied 250,000+ Retirees. Here's Their 3 SHOCKING Surprise
• Channel: Azul
• Speakers: None listed
• Duration: 00:09:23

Overview

This video discusses a report from JP Morgan that analyzes the spending behaviors of over 250,000 retirees. It challenges conventional wisdom about retirement spending, particularly the "retirement smile" theory, and highlights three key surprising findings: overall spending doesn't uniformly rise in later life, a temporary spending surge can occur in partially retired households, and spending volatility varies significantly among individuals. The video emphasizes the importance of understanding these patterns for retirement planning.

Key takeaways

• Challenging the "Retirement Smile": Contrary to the traditional belief that spending dips after retirement and rises again in old age due to healthcare costs, the JP Morgan study suggests that overall spending peaks in midlife and generally declines with age. While healthcare costs may increase, other expenses decrease, leading to a different spending curve.
• Spending Surge in Partially Retired Households: Households where one partner has retired while the other continues to work (partially retired) experience a temporary increase in spending. This surge is more pronounced in households with lower pre-retirement incomes (below $150,000), likely because they were previously sacrificing desired expenditures that they can now afford with retirement income.
• Spending Volatility and Spender Types: Retirement spending is more volatile than commonly assumed, and this volatility depends on individual spending habits. JP Morgan categorizes individuals into "steady Eddies" with low volatility and others with higher volatility, emphasizing the need for personalized financial planning to account for these differences.
• Importance of Planning: Understanding these spending patterns is crucial for determining how much money is needed to retire and when one can retire. The video recommends professional financial advice or specialized planning software (like Bolden, formerly New Retirement) over spreadsheets for accurate retirement planning.