J.P. Morgan Asset Management Research Reveals Nearly Half of Plan Participants Carry Credit Card Debt, Reducing Retirement Readiness

Core Insights - J.P. Morgan Asset Management's "Retirement by the Numbers" report emphasizes the need for improved plan design and participant support to enhance retirement security [1][2] Group 1: Participant Behavior and Financial Health - 48% of plan participants carry credit card debt, which increases the likelihood of taking loans from retirement plans and is associated with lower contribution rates and smaller account balances, reducing retirement readiness by up to 40% for older participants [1] - The average retiree spending declines by more than 30% between ages 60 and 85, with 60% of new retirees experiencing annual spending changes of 20% or more [2] Group 2: Plan Design and Contribution Strategies - Increasing contributions by just one percent starting at age 25 can help fund nine years of average Medicare-related expenses [2] - Nearly 70% of defined contribution participants are invested in target date funds, highlighting the importance of investment design and the glide path in achieving retirement success [3] Group 3: Importance of Personalized Solutions - The findings indicate that average income replacement needs vary widely based on pre-retirement salaries and Social Security benefits, underscoring the need for flexible, personalized retirement solutions [3] - Thoughtful plan features are essential to support long-term outcomes, as investment design alone cannot compensate for low savings rates [4]