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Retirement Wealth
Retirement wealth measures how prepared you are to eventually stop working without a significant decline in your quality of life. It's about the assets you're building today that will sustain you tomorrow. This dimension has a particularly unforgiving relationship with time: starting late makes the math significantly harder, while starting early, even at small amounts, gives compounding decades to work in your favor.
What the Assessment Measures
The Retirement Wealth assessment asks for three numbers: your age, your annual household income, and your current retirement savings across all accounts. Your score is your savings as a percentage of the J.P. Morgan Guide to Retirement savings checkpoint for someone of your age and income, capped at 100%. Your results also show:
- Savings Target Progress: The benchmark for your age and income, your gap or surplus, and your savings as a multiple of your salary.
- Suggested Savings Rate: An annual savings rate based on J.P. Morgan’s figures for your age and income, which assume you are starting from zero. If you are already on track, it is capped at 5% (10% for household incomes of $95,000 or more), and after age 50 it shows a 5%+ or 10%+ guideline instead.
- Retirement Income Outlook: How much of your pre-retirement income you will likely need, split between Social Security and your own savings.
The Savings Benchmarks
The J.P. Morgan Guide to Retirement provides widely cited savings benchmarks by age and income. While individual circumstances vary significantly, these provide a useful baseline:
- By age 30: 0.5–1× your annual income saved
- By age 40: 1.5–2.5× your annual income saved
- By age 50: 3.5–6× your annual income saved
- By age 60: 6–11× your annual income saved
These ranges are wide because they account for different income levels and expected retirement lifestyles. Higher earners typically need to save a larger multiple because Social Security replaces a smaller percentage of their pre-retirement income.
When you start Social Security also changes how much your savings must cover. The Social Security Claiming Age Calculator shows your monthly check at every age from 62 to 70 and the age when waiting starts to pay more.
Compound Growth: The Most Important Concept in Retirement Planning
Compound growth means your returns earn returns. $10,000 invested at age 25 becomes approximately $217,000 by age 65 at a 8% average annual return, without adding another dollar. The same $10,000 invested at age 45 becomes approximately $47,000 by age 65. That's the same investment producing nearly 5× more wealth simply because of a 20-year head start.
This is why the most important retirement action at any age is simply to start (or to increase contributions) today rather than later.
Tax-Advantaged Accounts: Use Them First
Tax-advantaged retirement accounts reduce your tax burden either now (traditional pre-tax accounts) or in retirement (Roth after-tax accounts). If your employer offers a 401(k) match, contributing enough to capture the full match is effectively a guaranteed 50–100% return on that contribution. This is almost always the highest-priority financial action available. Not sure which fits you? The Roth vs Traditional Calculator compares them at the same out-of-pocket cost, and the Retirement Savings by Age Calculator shows where you stand for your age.
After capturing any employer match, the general priority is: maximize Roth IRA contributions (if income-eligible), then return to maximize 401(k) contributions, then invest in taxable brokerage accounts.
How to Improve Your Score
- Find out if your employer offers a 401(k) match and ensure you're contributing enough to capture the full match.
- Open a Roth IRA if you don't have one and you're within the income limits. Even small regular contributions matter.
- Calculate where your current savings stand relative to the age-based benchmarks above.
- Increase your contribution rate by 1% immediately, and plan to increase it by 1% each year until you reach 15%+.
- Ensure your retirement investments are in low-cost diversified index funds, not sitting idle in a money market or savings option.
Related guides
Sources
- Guide to Retirement, J.P. Morgan Asset Management
- How much do I need to retire?, Fidelity
- Roth IRAs, Internal Revenue Service
- Compound Interest Calculator, Investor.gov, U.S. Securities and Exchange Commission
This guide is for informational and educational purposes only. It is not financial or tax advice. Consult a qualified financial advisor for personalized guidance.
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