Welcome!

News Feed Item

J.P. Morgan Releases "Breaking the 4% Rule," A Landmark Research Report That Lays the Groundwork For an Innovative Approach to Investing and Withdrawing Income in Retirement

NEW YORK, Feb. 27, 2014 /PRNewswire/ -- In a groundbreaking new study, J.P. Morgan researchers have developed a revolutionary new method for investing and withdrawing funds that improves the likelihood that retirees will be able to maintain their living standards, reduce the risk of running out of money and optimize their overall satisfaction. By creating a smarter and more personalized way to invest and withdraw money in retirement, this study, "Breaking the 4% Rule," lays the foundation for a dramatic shift in how people think about their retirement income strategy.

To read the executive summary of the report, visit http://bit.ly/1dw8CT7.

As a first step, this study identifies the shortcomings of conventional and more rigid withdrawal methods, particularly the well-known "4% Rule," which could expose retirees to unnecessary risks that they will outlive their retirement assets or, conversely, leave too much wealth untapped. In particular, J.P. Morgan's new "Dynamic Withdrawal Strategy" shows retirees and their advisors how they can adjust their withdrawal rates and portfolio allocations in response to changes in personal circumstances and preferences, as well as market conditions.    

"Beyond the inevitable comparisons to other methods, this research sets the stage for the first retirement income framework focused on the benefits of a dynamic approach to managing withdrawals and asset allocation in the context of maximizing retiree satisfaction," said Michael Falcon, Head of Retirement at J.P. Morgan Asset Management. "This unique strategy aims to incorporate the concept of 'lifetime utility' – or satisfaction – which defines retirement success as the fulfillment retirees gain from living life to the fullest while spending their retirement savings."

The Dynamic Withdrawal Strategy incorporates five distinct factors: (1) personal preferences for the amount and timing of withdrawals, (2) wealth and "lifetime retirement income," which the study defines as guaranteed income, such as social security, pensions and lifetime annuities, (3) age and life expectancy, (4) the randomness of markets and extreme events, and (5) the dynamic nature of each retiree's decision-making process.

"When all these factors are combined into a single, cohesive methodology, we can calculate an optimal withdrawal rate and asset allocation based on each retiree's unique profile," said Abdullah Sheikh, Vice President and Research Analyst for J.P. Morgan Asset Management's Asset Management Solutions-Global Multi-Asset Group.

This new research provides a framework that can be tailored to an individual's unique circumstances, preferences and appetite for risk. 

"The research that has gone into this strategy is specifically designed to help optimize the drawdown of each retiree's assets, enabling them to adjust withdrawal amounts and asset allocations in response to changing market conditions, personal circumstances and preferences," said Katherine Roy, J.P. Morgan Asset Management's Chief Retirement Strategist.

By creating this new patent-pending methodology, J.P. Morgan seeks to help retirees smooth out the unpredictable nature of future expenses and personal circumstances. By periodically adjusting withdrawal rates and asset allocations to changes in age, wealth, life expectancy and personal preferences, this framework requires retirees and their advisors to closely monitor their unique withdrawal strategies at least once a year.   

"This strategy offers retirees more confidence with respect to one of Americans' greatest financial needs and helps them make the most of their assets during their retirement years," Falcon added.

To read the executive summary of the report, visit http://bit.ly/1dw8CT7.

To read the full research report, visit http://bit.ly/NvrtaK.

About J.P. Morgan Asset Management – Retirement
J.P. Morgan Asset Management is a leading comprehensive retirement solutions provider dedicated to improving individual retirement outcomes. J.P. Morgan Retirement, with defined contribution assets under management of $109 billion, is a leading comprehensive retirement solutions provider dedicated to improving individual retirement outcomes. J.P. Morgan Retirement Plan Services provides bundled recordkeeping services to more than 2 million participants in more than 850 plans, representing more than $167 billion in retirement plan assets (as of December 31, 2013).  

About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of $1.6 trillion, 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), the parent company of J.P. Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.4 trillion and operations in more than 60 countries.  Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

SOURCE J.P. Morgan Asset Management

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
It is of utmost importance for the future success of WebRTC to ensure that interoperability is operational between web browsers and any WebRTC-compliant client. To be guaranteed as operational and effective, interoperability must be tested extensively by establishing WebRTC data and media connections between different web browsers running on different devices and operating systems. In his session at WebRTC Summit at @ThingsExpo, Dr. Alex Gouaillard, CEO and Founder of CoSMo Software, presented ...
In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., introduced you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He explored applications in several industries and discussed technologies that allow the deployment of advanced visualization solutions to the cloud.
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
"NetApp is known as a data management leader but we do a lot more than just data management on-prem with the data centers of our customers. We're also big in the hybrid cloud," explained Wes Talbert, Principal Architect at NetApp, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"We work around really protecting the confidentiality of information, and by doing so we've developed implementations of encryption through a patented process that is known as superencipherment," explained Richard Blech, CEO of Secure Channels Inc., in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, discussed how by using ne...
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, discussed how data centers of the future will be managed, how the p...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...