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JPMorgan Launches New Retirement Tool to Help You Generate Income


There’s more to retirement planning than just saving your money. Wealth accumulation is a vital component of a successful plan, but it’s only half of the calculus. How you withdraw your hard-earned savings over the course of retirement is nearly equally as important.

JPMorgan Asset Management announced the launch of a new tool to help retirees do just that. The financial services giant is rolling out enhancements to its suite of SmartRetirement target date funds, including annual recommended withdrawal amounts designed to help retirees stretch their nest eggs up to 35 years into retirement.

For help with retirement planning, consider working with a fiduciary financial advisor. Find an advisor who serves your area today.

New Tool For Retirement Withdrawals

A successful retirement takes careful planning. JPMorgan has a new tool that helps retirees calculate how much they can safely withdraw from their account each year.

JPMorgan’s series of target date funds, SmartRetirement and SmartRetirement Blend, will be managed to allow investors to withdraw a portion of their holdings each year until the target maturity year, which will be set for 35 year after retirement, the company announced Monday.

Investors with money in these target date funds can use the firm’s SmartRetirement Illustrator to generate their sample withdrawal amount: an estimate of how much of a participant’s account balance can be safely withdrawn in a given year while preserving future withdrawals through the fund’s target maturity year. The estimates will be based on market conditions as of Jan. 1 and the fund’s underlying strategy. However, they will not consider a shareholder’s age, financial needs, risk tolerance or required minimum distributions (RMDs) into account.

The company said the new spending capabilities were developed using JPMorgan’s access to spending data from nearly half of U.S. households.

“Retirees are increasingly looking to their employers to help them plan their income needs in retirement, and through our access to real-world spending data across JPMorgan Chase, we are uniquely positioned to build this innovative solution to help Americans navigate retirement,” Andrea Lisher, head of Americas Client for JPMorgan Asset Management, said in a statement. “Through integrating retirement income into our award-winning SmartRetirement target date series, we are not only helping people build adequate savings during their working years, but also giving them confidence to spend down in retirement.”

Will It Allay the Top Retirement Fear?

JPMorgan has a new tool that helps retirees calculate how much they can safely withdraw from their account each year.

When workers and current retirees are asked about their fears in retirement, running out of money is consistently among the most common responses, if not the most common. A TransAmerica survey of over 3,100 workers in late 2020 found that “outliving my savings and investments” was the No. 1 retirement fear, followed by “declining health that requires long-term care.”

According to JPMorgan’s research, nearly seven out of 10 defined contribution plan participants are concerned about outliving their money in retirement. As a result, 85% say that they would likely leave their assets in their plans in retirement if there was an option to help generate monthly retirement income. These statistics not only underscore the importance of saving, but the time and energy required for planning your withdrawals.

While there are a number of strategies aimed at stretching retirees’ savings across a time horizon of 25 to 30, their complexity can make them difficult for the average person to implement. That’s where a financial advisor can be a valuable asset in the retirement planning process. But JPMorgan’s SmartRetirement Illustrator can be a good place to start when it comes to planning how you’ll spend your retirement savings.

Bottom Line

Outliving their savings is perhaps the top retirement fear that workers face as they approach their golden years. JPMorgan has integrated new spending tools into its SmartRetirement target date funds to help retirees make annual withdrawals and preserve their savings for up to 35 years. While these suggestions don’t take a shareholder’s RMD obligations into account, they are based on market conditions and the overall investment strategy of a given fund.

Tips for Retirement Planning

  • A financial advisor can help you save for retirement and make a plan for withdrawing your assets. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Did you know the formula for calculating RMDs recently changed for the first time in decades? With the IRS raising the average life expectancy from 82.4 to 84.6, RMDs that begin in 2022 will be less than they were under the previous formula, which had been in place since 2002. That’s good news for retirees.
  • Are you on track to hit your savings goals? SmartAsset’s retirement calculator can help you estimate how much money you’ll have by the time you’re ready to retire.

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