To achieve your desired retirement, it is important to anticipate the possible challenges that retirees could face and be better prepared financially.

Retirement planning doesn’t have to be complicated - it’s more important to just get started. There are factors in a retirement plan that you have no control over, such as policy changes and market returns. But there are also factors you have some control over, such as lifestyle and career choices. As illustrated below, you can also shift the focus towards factors that you have full control over, such as asset allocation and spending habits.
 

Make the most of what you can control

2. Source: The Importance of Being Earnest, J.P. Morgan Asset Management

Achieving retirement goals takes disciplined saving and investing - all of which can feel overwhelming, especially as the retirement landscape continues to change¹.

The reality is that we are living longer and this could mean more time spent in retirement. Inflation also erodes the real value of money, hence relying on cash holdings in your retirement account alone may not be enough as these savings are utilised not just for retirement but also home purchase and healthcare.

To explain the macro trends, cash, as illustrated by the Bloomberg Short-term Treasury Total Return Index in the chart below, has underperformed compared with other asset classes over the long term. Even at times when the equity market is struggling, the bond market can present opportunities for relatively attractive returns.

Long-term returns of asset classes

Source: Bloomberg L.P., FactSet, J.P. Morgan Asset Management. US equity is based on S&P 500 Total Return Index; US high-yield is based on Bloomberg U.S. Corporate High Yield Total Return Index; US aggregate bonds is based on Bloomberg U.S. Aggregate Index; US cash is based on Bloomberg Short-term Treasury Total Return Index. Past Performance is not indicative of current or future results. High-yield credit refers to corporate bonds which are given ratings below investment grade and are deemed to have a higher risk of default. Yield is not guaranteed. Positive yield does not imply positive return. Investments are not similar to or comparable with fixed deposits. Data reflect most recently available as of 31.12.2022.

Here are some key retirement planning principles³ to help you make informed decisions¹ and take positive steps towards a successful retirement.

In addition to Central Provident Fund (CPF) savings, individuals can grow their retirement nest egg by investing. When building a successful retirement portfolio, investors can consider their unique needs, life stages and appropriate level of risk.

Based on their investment objectives, investors can, by harnessing a combination of income and growth investing solutions, build resilient retirement portfolios that can withstand a range of market conditions.

For example, income investing can help some investors tap into opportunities for consistent cash flows from asset classes such as bonds and dividend-paying stocks, while seeking to manage volatility.

Meanwhile, growth investing presents an avenue to seek opportunities for excess returns over longer time horizons, although it may also entail accepting some degree of volatility.

A diversified portfolio allocated across different asset classes and investment styles can help manage risk while seeking to generate returns over the long term. When required, seek professional advice.

JPMorgan ASEAN Equity Fund is the marketing name of the JPMorgan Funds - ASEAN Equity Fund. JPMorgan China Fund is the marketing name of the JPMorgan Funds – China Fund. JPMorgan Asia Growth Fund is the marketing name of the JPMorgan Funds – Asia Growth Fund.

Provided for information only based on market conditions as of date of publication, not to be construed as investment recommendation or advice. The manager seeks to achieve the stated objectives. There can be no guarantee the objectives will be met.

Diversification does not guarantee investment return and does not eliminate the risk of loss.

1. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
3. Source: "Principles for Successful Long-term Investing", J.P. Morgan Asset Management, February 2023.

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