Click here to close now.



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
Advances in technology and ubiquitous connectivity have made the utilization of a dispersed workforce more common. Whether that remote team is located across the street or country, management styles/ approaches will have to be adjusted to accommodate this new dynamic. In his session at 17th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., focused on the challenges of managing remote teams, providing real-world examples that demonstrate what works and what do...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
In most cases, it is convenient to have some human interaction with a web (micro-)service, no matter how small it is. A traditional approach would be to create an HTTP interface, where user requests will be dispatched and HTML/CSS pages must be served. This approach is indeed very traditional for a web site, but not really convenient for a web service, which is not intended to be good looking, 24x7 up and running and UX-optimized. Instead, talking to a web service in a chat-bot mode would be muc...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Most people haven’t heard the word, “gamification,” even though they probably, and perhaps unwittingly, participate in it every day. Gamification is “the process of adding games or game-like elements to something (as a task) so as to encourage participation.” Further, gamification is about bringing game mechanics – rules, constructs, processes, and methods – into the real world in an effort to engage people. In his session at @ThingsExpo, Robert Endo, owner and engagement manager of Intrepid D...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
With microservices, SOA and distributed architectures becoming more popular, it is becoming increasingly harder to keep track of where time is spent in a distributed application when trying to diagnose performance problems. Distributed tracing systems attempt to address this problem by following application requests across service boundaries, persisting metadata along the way that provide context for fine-grained performance monitoring.
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including clou...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...