How does it work?
The "sample spend-down" amount is announced at the beginning of each year. If investors adhere to it each year, with the amount likely changing annually, the assets in the Fund should be at or close to zero by Year 35.
For example, if you had $100,000 invested in SmartSpending 2015 and the annual sample spend down amount for 2020 was 5.3% the amount of money to spend comfortably would be $5,300 for 2020.
THE PARTICIPANT EXPERIENCE
The SmartSpending Illustrator helps retirees decide how much to withdraw each year, based on the provided sample spend down amount, so they can do what they enjoy with less worry about running out of money.
INSIGHTS INTO REAL-LIFE RETIREE SPENDING BEHAVIOR
SPENDING CURVE1
SPENDING SURGE2
SPENDING VOLATILITY2
1 Source: Total spending and all category sub-totals except checks, cash and health care costs: Chase data including aggregated and de-identified Chase credit card (excluding some co-branded cards), debit card, electronic payment, ATM withdrawal and check transactions from January 1 – December 31, 2016; J.P. Morgan analysis.
2 Source: Aggregated and de-identified Chase credit card, debit card, electronic payment, ATM withdrawal and check transactions from October 2012 – December 2016. Outliers in each asset group were excluded (0.1% of top spenders in each spending category). Information that would have allowed identification of specific customers was removed prior to each analysis.
For more information, please email us or contact your J.P. Morgan client advisor.