J.P. Morgan Asset Management Releases 2022 Guide to Retirement, Exploring Key Issues Impacting Retirement Investors
10th edition of Guide examines impacts of longevity, spending behaviors and inflation on retirement
New York, NY, March 7, 2022 : J.P. Morgan Asset Management today released the 10th edition of its annual Guide to Retirement, analyzing the most significant issues impacting retirement to help investors make informed decisions and take positive actions to achieve a comfortable retirement.
“Retirement investors and advisors are grappling with a range of challenging issues, from an evolving inflation picture, to an increase in forecasted spending needs in retirement, and ongoing questions around Social Security,” said Katherine Roy, Chief Retirement Strategist, J.P. Morgan Asset Management. “The 2022 Guide to Retirement has been designed to help advisors tackle the most pressing retirement challenges and provide strategies to help drive stronger retirement outcomes for clients.”
Below is an overview of five key retirement themes featured in the 2022 Guide to Retirement:
1. Plan for an even longer life (and how to do it well)
- Average life expectancy continues to increase and investors need to plan on the probability of living much longer – perhaps 35 years in retirement – particularly for non-smokers who are in excellent health.
- Aging successfully is a key priority and individuals should focus on the ‘PUSHES’ in retirement
- Investing a portion of your portfolio for growth is important to maintain your purchasing power over time, particularly in an inflationary environment.
- Income replacement needs have risen across the income spectrum and now ranges from 72-98%.
- For households with estimated investable wealth of $1m - $3m, average spending is highest around age 50 – 55, declines until about age 80 when it begins to rise again.
- Those at older ages tend to spend less on all categories but health care and charitable contributions.
- Too few Americans have calculated what it will take to be able to retire at their current lifestyle.
- Retirement checkpoint calculations can help investors to quickly gauge whether they are “on track” to afford their current lifestyle for 35 years in retirement based on their current age and annual household income.
- When planning for retirement, it’s critical to take a long-term view, including planning for health care costs separately.
- For example, older households purchase more health care, but less transportation than households age 35-44, making them less vulnerable to the volatile energy category than younger households. Conversely, health care costs grew about half as fast as the long term average in 2021..
- Aligning retirement income and assets based on how they will be used to support an individual’s retirement lifestyle is one way to ensure a higher degree of confidence through retirement.
- Known as “guarantee the floor,” our analysis shows how stable spending can be aligned with relatively safe or guaranteed funding sources, while variable spending can be covered by retirement income solutions and may require a cash reserve to be available through the year.
2. Most Americans are spending more…then less…then more
3. Retirement savings “checkpoints” should be assessed from an early age
4. Keep inflation in perspective when planning for retirement
5. Stable vs. variable is the new “discretionary vs. non-discretionary”:
J.P. Morgan Asset Management helps financial advisors serve DC plan participants by 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 2022 Guide to Retirement, click here.
About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of $2.7 trillion (as of 12/31/2021), 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.
J.P. Morgan Asset Management is the marketing name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.
JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.7 trillion in assets and $294.1 billion in stockholders’ equity as of December 31, 2021. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com
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.