J.P. Morgan Asset Management Releases 2021 Guide to Retirement

Rhea-AI Summary

On March 10, 2021, J.P. Morgan Asset Management released its 2021 Guide to Retirement, addressing key issues impacting retirement planning. The guide highlights five central themes: managing lower expected returns (5.75% down from 6%), the necessity of diversified investments, leveraging record savings from 2020, proactive tax planning amid upcoming tax rate changes, and adapting retirement timelines post-pandemic. With USD 2.3 trillion in assets under management, J.P. Morgan emphasizes the importance of informed decision-making to navigate retirement successfully.

Positive

• Emphasis on diversified investments for better retirement outcomes.
• Proactive tax planning strategies identified before potential tax rate hikes in 2026.
• Opportunities for retirees to manage and optimize record savings from 2020.

Negative

• Reduction in pre-retirement rate of return assumption from 6% to 5.75%, indicating lower expected investment growth.

NEW YORK, March 10, 2021 /PRNewswire/ -- J.P. Morgan Asset Management today released the 2021 Guide to Retirement, examining the most significant issues impacting retirement, including current challenges and opportunities and the tools needed to support planning conversations.

"The pandemic-impacted 2020 has caused many individuals to reflect on their retirement goals, so it's more critical than ever for advisors to understand and act upon the complex issues that will drive or derail retirement planning objectives in the year ahead," said Katherine Roy, Chief Retirement Strategist, J.P. Morgan Asset Management. "Our 2021 Guide to Retirement considers a number of timely themes impacting those planning for retirement, such as managing lower expected returns for those closer to retirement, the importance of diversified investing, and tax management strategies."

Below is an overview of five key retirement themes featured in the 2021 Guide to Retirement:

1)  Managing lower expected returns for those closer to retirement

• The pre-retirement rate of return assumption has been lowered to 5.75% from 6%.
• Households closest to retirement who are most reliant on their retirement savings need to carefully navigate their final savings years.

2)  How to diversify investments to and through retirement

• With cash paying nothing, investing is key to long term retirement success.
• More diversified investing within both equities and fixed income results in better outcomes.

3)  Making the most of record savings in 2020

• While fiscal stimulus was a driver, reduced spending also played a key role in 2020.
• Opportunities to identify costs that people didn't miss, to spend less to save more.

4)  Tax planning not just for today, but for the future 

• Income taxes will rise in 2026 when the Tax Cuts and Jobs Act sunsets.
• Careful planning with Roth options and Health Savings Accounts to achieve healthy income tax diversification should be a priority.

5)  The 'New Retirement' – sooner than planned?

• The effects of the pandemic may lead to changes in retirement timing.
• Making informed Social Security claiming decisions remains a priority.

J.P. Morgan Asset Management serves millions of DC plan participants, offering industry-leading insights such as the Guide to Retirement, Guide to the Markets, Long-Term Capital Market Assumptions and spending and saving research in collaboration with the Employee Benefit Research Institute (EBRI). The firm also provides a one-stop-shop of digital tools and resources including Target Date Compass®.

To view the full 2021 Guide to Retirement, click here.

About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of USD 2.3 trillion (as of 31 December 2020), is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity.

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $3.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co., and its affiliates worldwide. 

Important Information

The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment 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 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. 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 professional advisers, if any investment mentioned herein is believed to be suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. 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.

 

View original content:http://www.prnewswire.com/news-releases/jp-morgan-asset-management-releases-2021-guide-to-retirement-301244481.html

SOURCE J.P. Morgan Asset Management

FAQ

What is the focus of JPM's 2021 Guide to Retirement?

JPM's 2021 Guide to Retirement focuses on managing lower expected returns, diversified investments, leveraging savings, proactive tax planning, and adapting retirement timelines.

How has the expected rate of return changed for retirement planning?

The expected rate of return for pre-retirement planning has been lowered to 5.75% from 6%.

What are the implications of the upcoming tax changes mentioned in the guide?

The guide highlights that income taxes are expected to rise in 2026, prompting the need for careful tax planning.

How can retirees benefit from the record savings in 2020?

Retirees should identify costs saved during 2020 as opportunities to enhance their savings strategies.

What does the guide suggest regarding retirement timing after the pandemic?

The guide suggests that the pandemic may prompt changes in retirement timing, emphasizing the need for informed Social Security decisions.