Planning for Vacation vs. Retirement
A Charles Schwab survey revealed a significant discrepancy in time spent researching major purchases: while over half of respondents dedicated five hours or more to buying their last car and 39% spent the same amount exploring vacation options, only 11% reported spending the same amount of time planning for retirement or evaluating investment choices. A 2022 study by the American Psychological Association found that financial concerns were a major source of stress for a significant percentage of Americans, with nearly three in five adults citing financial difficulties as a primary stressor.
The truth is, for most Americans, if they want to build a future of financial independence (with less stress), they have to spend time planning. The good news is that it’s not as daunting as you might think.
Essential Strategies
Our team has compiled a list of essential strategies we feel are key to getting started and will put you well on your way to planning your future retirement:
Understand Your Expenses
Start by looking over your expenses for the last 12 months. A budget starting with actual expenses can be eye-opening. Why? It’s based on what you actually spend, not what you think you do. It can be eye-opening to see where your income is flowing on a monthly basis. We see that the transparency of knowing and understanding where your money is going can be a stress reliever for many. It puts you in control of prioritizing how you spend your money. We also encourage clients to use technology to set up automation and alerts that will help them better understand their financial behavior.
Prioritize Your Saving & Planning
If you are not currently in retirement, you are in the “build” phase of your life, where you save and plan for the future. This time should include saving for retirement, other expenses such as family, travel, and new experiences. What you do/build during this phase will help you get to your retirement phase.
Save Early & Save Often
Compound interest is your best friend. Legend has it that Albert Einstein once declared compound interest as the Eighth Wonder of the World. What is compound interest? For savers, it means earning interest on your original principal and the interest your investment generates. Have you heard of the Rule of 72? The Rule of 72 is an easy compound interest calculation to quickly determine how long it will take to double your money based on the interest rate. Simply divide 72 by the interest rate to determine the outcome. For example: At a 2% interest rate, it would take 36 years to double your money, but at a 12% interest rate, it would only take six years to double your money. The illustration below shows how the earlier someone can start investing, the more time their money will have to grow.
Practice Tax Efficiency
Let’s face it - taxes are a necessary evil. However, tax-smart investing and withdrawal strategies can help you mitigate exposure and keep more of what you’ve earned. Whether you donate more, invest in a loved one’s future, or maximize your tax-deductible contributions, small reductions in your tax costs today can have a big impact on the wealth you build over time and how quickly you build it.
Get Your Legal Documents in Order
We see it too much; people die without these plans in place. Our philosophy is that clients should have the opportunity to control what happens during their lifetime. Each appointment we conduct starts with a conversation about setting up your Estate Plan and choosing your executor to ensure that your desired outcomes occur in the event of your death.
Let's Team Up
With the correct guidance and expertise on your side, life can be a lot more flexible and less stressful. When you plan and strategize properly (vacation and retirement), there’s a lot more freedom to live – and life can be a lot more fun!
Charles Schwab. (2023). 2023 Modern Wealth Survey.
American Psychological Association. (2023). Stress in America: Paying with Our Health.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.
The rule of 72 is a mathematical concept and does not guarantee investment results nor functions as a predictor of how an investment will perform. It is an approximation of the impact of a targeted rate of return. Investments are subject to fluctuating returns and there is not assurance that any investment will double in value.
This material was prepared by Nathan Wyatt for the Investment Service Center’s use.
Tariffs may be the market’s new favorite buzzword, but the Mag 7 are putting up another quarter of magnificent earnings growth. With 6 out of the 7 reporting, earnings have come in 11.3% above consensus estimates, the largest surprise since 3Q23. As this week’s chart shows, since the first Mag 7 name reported on April 22, analysts have revised full-year estimates up by 1.8% vs. down -0.8% for the S&P 493. While other companies are discussing cost cutting and hiring freezes, Mag 7 CEOs doubled down on capital expenditures and adding headcount to support their AI businesses. Early monetization results include double digit cloud growth, mid-single digit increases in ad conversions from LLM enhancements and billions of AI users.
Still, the risks are significant. The Mag 7 earn 48% of their revenues and source approximately 45% of their supply chain from outside of the U.S. Semiconductors imports have thus far been excluded from tariffs, insulating companies from direct impacts. However, several end-markets, like hardware and autos, are materially exposed. As price increases mute demand, semi companies too will suffer. The rest of the Mag 7 depend on consumers to buy their products or drive their advertising and e-commerce businesses and are therefore vulnerable to any macro slowdown. There are other regulatory risks as well, including monopoly investigations into search and app store markets. All in all, we do think the Mag 7 may be able to power through tariffs better than other industries, but investors should ensure their exposure is right sized.
Chart of the Week: Factset, S&P Global, J.P. Morgan Asset Managment. Data are as of April 8, 2025.
Thought of the Week: Factset, S&P Global, J.P. Morgan Asset Managment. Data are as of April 8, 2025.
Index: Institute for Supply Management Manufacturing Index; PCE: Personal consumption expenditures; Philly Fed Survey: Philadelphia Fed Business Outlook Survey; PMI: Purchasing Managers' Manufacturing Index; PPI: Producer Price Index; SAAR: Seasonally
Adjusted Annual Rate
MSCI EAFE is a Morgan Stanley Capital International Index that is designed to measure the performance of the developed stock markets of Europe, Australasia, and the Far East.
Bond Returns: All returns represent total return. Index: Bloomberg US Aggregate; provided by: Bloomberg Capital. Index: Bloomberg Investment Grade Credit; provided by: Bloomberg Capital. Index: Bloomberg Municipal Bond 10 Yr; provided by: Blomberg Capital. Index: Bloomberg Capital High Yield Index; provided by: Bloomberg Capital.
Key Interest Rates: 2 Year Treasury, FactSet; 10 Year Treasury, FactSet; 30 Year Treasury, FactSet; 10 Year German Bund, FactSet. 3 Month LIBOR, British Bankers’ Association; 3 Month EURIBOR, European Banking Federation; 6 Month CD, Federal Reserve; 30 Year Mortgage, Mortgage Bankers Association (MBA); Prime Rate: Federal Reserve.
Commodities: Gold, FactSet; Crude Oil (WTI), FactSet; Gasoline, FactSet; Natural Gas, FactSet; Silver, FactSet; Copper, FactSet; Corn, FactSet. Bloomberg Commodity Index (BBG Idx), Bloomberg Finance L.P.
information from FactSet's Pricing database as provided by MSCI. Russell 1000 Value Index,
Style Returns: Style box returns based on Russell Indexes with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for stated period including the reinvestment of dividends. The Index used from L to R,
top to bottomare: Russell 1000 Value Index (Measures the performance of those Russell 1000 companies with lower price-to book ratios and lower forecasted growth values), S&P 500 Index (Index represents the 500 Large Cap portion of the stockmarket, and
is comprised of 500 stocks as selected by the S&P Index Committee), Russell 1000 Growth Index (Measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values), Russell Mid Cap Value Index (Measures
the performance of those Russell Mid Cap companies with lower price-to-book ratios and lower forecasted growth values), Russell Mid Cap Index (The Russell Midcap Index includes the smallest 800 securities in the Russell 1000), Russell Mid Cap Growth Index (Measures the performance of those Russell Mid Cap companies with higher price-to-book ratios and higher forecasted growth values), Russell 2000 Value Index (Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values), Russell 2000 Index (The Russell 2000 includes the smallest 2000 securities in the Russell 3000), Russell 2000 Growth Index (Measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher forecasted growth values).
Past performance does not guarantee future results.
instrument. The views and strategies described may not be appropriate for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The Market Insights program provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decision-making, the program explores the implications of current economic data and changing market conditions.
The J.P. Morgan Asset Management Market Insights and Portfolio Insights programs, as non-independent research, have not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor are they subject to any prohibition on dealing ahead of the dissemination of investment research.
This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any
jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professional, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.
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