Retirement sure has changed since the Social Security Administration (SSA) issued its first monthly retirement check in 1940. That amount was only $22.54. And back then a 65 year-old retiree was expected to live for only another 12-13 years before dying. Today seniors have higher benefits and a much longer life expectancy thanks to improvements in nutrition, healthcare, and a myriad of other factors. Banking firm J.P. Morgan produces an annual retirement guide chock full of all kinds of interesting retirement data. While the data can’t predict what will happen to any one individual, they do provide a general view of life in retirement today. Here are some of the highlights from their 2025 guide:

• Longevity: There’s a 64% chance that you’ll make it to age 85 if you’re a non-smoking man, and a 73% chance for a non-smoking woman. That percentage goes up to 90% if you’re married. Non-smokers, however, will not statistically fare as well. For men the percentage drops to 39% and for women 52%.
• Workplace: 70% of current workers expect to retire at age 65 or later, but only 28% actually do. Top reasons for earlier retirement were company downsizing and health problems. 39% retired early because they could afford to. Despite the expectation of 65 as the normal retirement age, 27% of the current workforce comprises workers between age 65 and 74, with 8% over age 74. Why are they working so long? Mostly because they enjoy it and because it gives them the opportunity to stay active and involved.
• Spending: The biggest category for both younger citizens (age 35-44) and seniors over age 75 is housing, representing over 40% of all annual spending. Perhaps not surprisingly seniors spend a lot bigger percentage of their budgets on health care as compared to the younger cohort (16% vs. 7%) and less on transportation (12% vs. 19%). One interesting difference: seniors are a lot more charitable (7% vs. 3%).
• Inflation: As many seniors have learned over the past several years, inflation is the single biggest risk to their savings. An inflation rate of only 3% per year will cut the purchasing power of your savings in half after 24 years, accelerating the savings drawdown late in retirement for even the most basic expenses. Although the current inflation rate (2024) of 2.9% is the same as the average annual rate since 1982, it is currently lower for health care (2.8% vs.4.5%), good news for retirees since their spending in this category is higher. But the housing inflation rate has grown much higher (4.1% vs. 3.0%), a disadvantage to renters as well as to those having to share homes.

Among other things, the authors also reinforce the benefit of saving and investing early and consistently during your pre-retirement years. Even an early investor who stops saving & investing after ten years has a better outcome than the investor who starts later and saves more.

Here’s a link to the report: https://am.jpmorgan.com/us/en/asset-management/protected/institutional/insights/retirement-insights/guide-to-retirement/.

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