Retirement Insights

Guide to
Retirement
2022
Page reference GTR 2

Retirement Landscape Spending Investing

3. The retirement equation 22. Diversified sources of retirement 40. Goals-based wealth management
4. Life expectancy probabilities funding 41. Structuring a portfolio in retirement: the
5. Changes in lifestyle 23. “The Prosperous Retirement”: bucket strategy
6. Older Americans in the workforce theoretical spending profile 42. Structuring a portfolio to match investor
7. Managing expectations of ability to work 24. Changes in spending goals in retirement
8. Percentage of households with a 25. Changes in spending: partially and fully 43. Retirement profiles by planning
pension retired households outcome
9. Social Security timing trade-offs 26. Spending and inflation 44. Impact of being out of the market
10. Claiming Social Security: decision tree 27. The 4% rule: projected outcomes vs.
11. Maximizing Social Security benefits: historical experience Defined Contribution
maximum earner 28. Dollar cost ravaging: timing risk of 45. Tax implications for retirement savings
12. Social Security benefit claiming withdrawals by account type
considerations 29. Mitigating dollar cost ravaging: 46. Prioritizing long-term retirement
dynamic spending savings
Saving 30. Health care costs for retirees before age 47. The benefits of auto-escalation
13. Retirement savings checkpoints: 65 48. The toxic effect of loans and
Household Income <$90k 31. Marketplace plan costs usually withdrawals
14. Retirement savings checkpoints: increase with age
Household Income >$100k 32. Three steps for Medicare coverage Reference
15. Income replacement needs vary by 33. 65 and working: should I sign up for 49. Traditional IRAs vs. Roth IRAs:
household income Medicare? 2021/2022
16. Annual savings needed if starting today: 34. Rising health care costs in retirement 50. Retirement plan contribution and
Household Income <$90k 35. 2022 Monthly Medicare surcharges deferral limits: 2021/2022
17. Annual savings needed if starting today: 36. Long-term care planning 51. A closer look at tax rates: 2022
Household Income >$100k 37. Disability incidence increases with age 52. Disclosures
18. Historical annual savings rate 38. Median cost of a home health aide
19. Benefit of saving and investing early 39. Long-term care planning options
20. Evaluate a Roth at different life stages
21. Maximizing an HSA for health care
expenses
 The retirement equation GTR 3
Retirement Landscape

A sound retirement plan

TOTAL
CONTROL Asset Make the most of the things
allocation that you can control but be
and sure to evaluate factors that
location are somewhat or completely
out of your control within
your comprehensive
Saving vs. Market retirement plan.
spending returns

OUT OF YOUR
RETIREMENT CONTROL

Policy
Employment regarding
earnings and taxation,
duration savings and
benefits

Longevity

SOME
CONTROL

Source: The Importance of Being Earnest, J.P. Morgan Asset Management, 2013.
 Life expectancy probabilities GTR 4

If you’re age 65 today, the probability of living to a specific age or beyond

Retirement Landscape

Plan for longevity

100%
Average life expectancy at age 65 Average life expectancy
Year Women Men Difference continues to increase and is
89% a mid-point not an end-
1990 84.0 80.0 4.0 point. You may need to plan
14% 2020 84.5 82.0 2.5 on the probability of living
80% much longer – perhaps 35
2090 89.3 87.2 2.1
71% 72% years in retirement –
particularly if you are a non-
smoker in excellent health.
15% 62%
60% 23%
Investing a portion of your
18% 52% portfolio for growth is
important to maintain your
45% 44%
18% 41% purchasing power over time.
40%
75%
20%
18% 30% 24%
56%
49% 22%
44% 16% 20% 18%
20%
34% 13%
14% 13%
25% 23% 20% 6% 7% 14%
14% 10%
8% 7% 5% 6% 1%
0%
85 years 90 years 95 years 100 years
Women Men Couple – at least one lives to specified age Couple – both live to specified age

Non-smoker in excellent health

Source (chart): Social Security Administration, Period Life Table, 2018 (published in the 2021 OASDI Trustees Report); American Academy of
Actuaries and Society of Actuaries, Actuaries Longevity Illustrator, http://www.longevityillustrator.org/ (accessed January 14, 2022), J.P.
Morgan Asset Management.
Source (table): Social Security Administration 2021 OASDI Trustees Report.
Probability at least one member of a same-sex female couple lives to age 95 is 26% and a same-sex male couple is 14%.
 Changes in lifestyle GTR 5

Daily hours spent by activity per age

Retirement Landscape

24 Spend time planning

Other
your time
20 Eating, drinking, personal care & home management
Retirement offers the gift of
Hours per day

16 Socializing, leisure, exercise time to do the things that

matter most to you.
12
Working
While our happiest years may
8
be in retirement, the
4 Sleeping transition isn’t always a walk
on the beach. Do your
0 homework in advance to
50 55 60 65 70 75 80 know what you are retiring to,
Age not just what you are retiring
from.
An individual who “PUSHES” tends to age well:
To make the most of your
retirement years, be sure to
Has a sense
Uses time to work, Socializes with prioritize what “PUSHES” you
help others, go to friends & family; to age well.
of Purpose events and/or spends time
participate in activities with others

Practices Focuses on
Healthy Experiences
gratitude
Strengths
behaviors and abilities

Source (top chart): Bureau of Labor Statistics American Time Use Survey 2019, J.P. Morgan Asset Management analysis. Values include
individuals who do and do not participate in the activities. Values are averaged across rolling five-year age groups. Each category includes
time spent traveling to and from the activity if applicable.
Source (bottom chart): J.P. Morgan Asset Management analysis; PNAS.org, Vol 116, No. 4, Leading a Meaningful Life at Older Ages, January
22, 2019, Volume 8, Article 517226; Frontiers in Medicine, Fostering Well-being in the Elderly, April 2021, The Gerontologist Vol. 53, No. 6, 939–
949; Perceptions of Successful Aging Among Diverse Elders with Late-Life Disability, December 11, 2012.
 Older Americans in the workforce GTR 6

Percentage of people in the civilian labor force 2000-2030

Retirement Landscape

40% It’s still off to work I go

32%
26% 27% More people are working
30%
later in life, motivated by the
19%
65-74 desire to do so.
20%
12%
7% 9% 75+
10% 5%

0%
2000 2010 2020 2030

Total civilian
population 65+ 33m 39m 55m 72m

Major reasons people work in retirement

Buy extras 27%

Avoid reducing savings / "nest egg" 24%
Make ends meet 17%
Needs

Decreased savings / investments 11%

Keep insurance or benefits 9%
Financially support others 5%
Stay active and involved 52%
Enjoy working 38%
Wants

Job opportunity 22%

Try new career 6%
0% 20% 40% 60%
Source (top chart): Bureau of Labor Statistics, Employment Projections, Table 3.2 and Table 3.3. Actual data to 2020 and projection to 2030.
Civilian population age 65+ is non-institutionalized population.
Source (bottom chart): Employee Benefit Research Institute, Mathew Greenwald & Associates, Inc., 2021 Retirement Confidence Survey.
Latest available data as of December 31, 2021. Individuals may have given more than one answer.
 Managing expectations of ability to work GTR 7

Expectations of workers vs. retirees Reasons cited for retiring earlier

Retirement Landscape

To retire at age 65 or older than planned Early Retirement

70% You may not have complete
64% Health problems or control over when you retire,
36% so you should consider
disability
60% having a back-up plan. You
Company downsizing may have to draw income
32%
/ closing earlier and make your
50% portfolio last longer than you
Care for spouse or anticipate.
11%
other family member
40%
Outdated skills 7%
30% 28%
Other work-related
7%
reason
20%
Able to afford early
41%
retirement
10%
Want to do
19%
something else
0%
Current workers' Experience of Employer offered
15%
expectations actual retirees incentive to retire early

COVID risk 5%
Median retirement age:
Expected: 65 0% 25% 50%
Actual: 62

Source: Employee Benefit Research Institute, Mathew Greenwald & Associates, Inc., 2021 Retirement Confidence Survey. Individuals may
have given more than one answer. Latest available data as of December 31, 2021.
 Percentage of households with a pension GTR 8

60%
Retirement Landscape

51%
50%

40% 39%

30%
30%

24%

20%
16%

8%
10%

0%
Generation Z Millennials Generation X Baby Boomer Silent All Households
(Age 21-25) (Age 26-41) (Age 42-57) (Age 58-76) (Age 77+)

Source: LIMRA Secure Retirement Institute analysis of 2019 Survey of Consumer Finances, Federal Reserve Board, 2020. Latest available
data as of December 31, 2021. Age is for head of household in 2022. Percent of households having access to a DB plan denotes either survey
respondent or spouse: a) has DB pension at current job; b) had accrued a DB pension benefit from a former job but has not yet claimed
benefits; or c) is currently receiving benefits from DB pension. A pension is also referred to as a defined benefit (DB) pension plan.
 Social Security timing trade-offs GTR 9

Benefits differ by birth year and claim age

Retirement Landscape

Full Retirement Age (FRA) = 100% benefit Understand the trade-

Birth year: 1954 or earlier Age 70 offs
Age 62 Full Retirement Age: 66
Deciding when to claim
Decreased benefits Increased benefits benefits will have a
100% permanent impact on the
75% -6.25% average per year +8% per year 132%
benefit benefit you receive. Claiming
before your full retirement
age can significantly reduce
74.2% Birth year: 1955 (current age: 67) Full Retirement Age: 66 + 2 months 130.7% your benefit, while delaying
increases it.
73.3% 1956 (66) 66 + 4 months 129.3%
In 2017, full retirement age
72.5% 1957 (65) 66 + 6 months 128.0% began transitioning from 66
71.7% 1958 (64) 66 + 8 months 126.7%
to 67 by adding two months
each year for six years. This
70.8% 1959 (63) 66 + 10 months 125.3% makes claiming early even
more of a benefit reduction.
Birth year: 1960 or later Age 70
Age 62 Full Retirement Age: 67

100%
70% -6.00% average per year +8% per year 124%
benefit

Cost of living increase for Average cost of living

benefits received in 2022 5.9% adjustment (1985-2022) 2.6%

For illustrative purposes only. The Social Security Amendments Act of 1983 increased FRA from 65 to 67 over a 40-year period. The first phase
of transition increased FRA from 65 to 66 for individuals turning 62 between 2000 and 2005. After an 11-year hiatus, the transition from 66 to
67 (2017-2022) will complete the move. This material should be regarded as educational information on Social Security and is not intended
to provide specific advice. If you have questions regarding your particular situation, you should contact the Social Security Administration
and/or your legal or tax professional.
Source: Social Security Administration, J.P. Morgan Asset Management.
 Claiming Social Security: decision tree GTR 10

Do you have other sources of income?

Retirement Landscape

START !
HERE Y N Weigh the odds of living to various
ages and consider health status &
Age family history of longevity
Are you Consider claiming 77+ GTR 4: Life expectancy
working? your benefit probabilities
Do you expect to live
Y N beyond age 77?
Y N
Do you prefer receiving a Consider taking Age
smaller benefit earlier vs. your benefit as
waiting for a larger early as age 62 62
Delay claiming, benefit?
Age
particularly if you Do you want to claim your benefit
Y N 81+
are subject to the to preserve your investment
earnings test portfolio? Do you expect to live
Y N beyond age 81?
Consider taking Age
Y N benefit at Full
! Retirement Age* 67
You may want to take your benefit,
but understand what you may be
leaving on the table at older ages !
GTR 11: Maximizing Social Evaluate which claiming age results in
Security benefits the highest lifetime benefit based on
your expected rate of return and life
expectancy Consider waiting
GTR 12: Social Security benefit Age
to age 70 to take
claiming considerations
your benefit
70

Source: Social Security Administration, J.P. Morgan Asset Management. This material should be regarded as educational information on
Social Security and is not intended to provide specific advice. If you have questions regarding your particular situation, you should contact
the Social Security Administration and/or your legal or tax professionals.
*Full Retirement Age (FRA) of 67 is for individuals born 1960 or later. This decision tree is also appropriate for other FRAs.
 Maximizing Social Security benefits: maximum earner GTR 11

Cumulative individual maximum benefit by claim age

Retirement Landscape

Full Retirement Age (FRA) = Age 67 Planning opportunity

Breakeven age
Delaying benefits means
FRA/70 $1,622k increased Social Security
$749k income later in life, but your
Claim at 70: $454k portfolio may need to bridge
$4,159 per month
the gap and provide income
until delayed benefits are
received.
62/FRA $1,448k
$743k
Claim at FRA: $505k
$3,354 per month

$1,161k
$502k $668k
Claim at 62:
$2,348 per month

Age 62 67 70 77 81 90

At age 62, 100% 93% 87% 70% 57% 22%

probability of
living to at 100% 96% 92% 80% 69% 33%
least age: *
100% 99% 99% 94% 87% 48%

Source: Social Security Administration, J.P. Morgan Asset Management.

*Couple assumes at least one lives to the specified age or beyond. Breakeven assumes the same individual, born in 1960, earns the
maximum wage base each year ($147,000 in 2022), retires at the end of age 61 and claims at 62 & 1 month, 67 and 70, respectively. Benefits
are assumed to increase each year based on the Social Security Administration 2021 OASDI Trustee’s Report intermediate estimates
(annual benefit increase of 2.4% in 2023 and thereafter). Monthly amounts with the cost of living adjustments (not shown on the chart) are:
$3,776 at FRA and $5,027 at age 70. Exact breakeven ages are 76 & 9 months and 80 & 7 months.
 Social Security benefit claiming considerations GTR 12

Comparison of claim age based on an individual’s expected rate of return and longevity
Retirement Landscape

Color represents the claim age with the highest expected lifetime benefits Consider portfolio
10% returns and your life
9% expectancy
8% The lower your expected
Expected annual rate of return

Claim at age 62 long-term investment return

7% Claim at age 62 and the longer your life
6%
expectancy, the more it pays
Net of Fees

to wait to take your benefit.

5%

4%

3%

2% Claim at age 70
1%

0%
62 67 70 77 81 90 100
Expected longevity
How to use:
• Go to the intersection of your expected rate of return and your expected longevity.
• The color at this intersection represents the Social Security claim age that maximizes total wealth (cumulative
Social Security benefit and investment portfolio) given three claiming options: age 62, Full Retirement Age (age
67) and age 70.
• Example: For a woman with an expected consistent 5.5% rate of return (net of fees) and life expectancy of 88:
consider claiming at age 70.
Source (chart): Social Security Administration, J.P. Morgan Asset Management.
Source (longevity): Social Security Administration 2021 OASDI Trustees Report.
Assumes the same individual, born in 1960, retires at the end of age 61 and claims at 62 & 1 month, 67 and 70, respectively. Benefits are
assumed to increase each year based on the Social Security Administration 2021 OASDI Trustee’s Report intermediate estimates (annual
benefit increase of 2.4% in 2023 and thereafter). Analysis is based on an average earner (all earnings profiles yield similar results). Expected
rate of return is deterministic, in nominal terms, and net of fees.
 Retirement savings checkpoints Household income ≤$90k
Annual savings rate: 5% GTR 13

Current household income

$30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000
Model assumptions
Current Annual gross savings rate:
Checkpoint (x current household income)
age 5%
25 See “Annual 0.1 0.1 0.3 0.5 0.6 0.8
Pre-retirement portfolio:
savings 60/40 diversified portfolio
30 0.2 0.5 0.7 1.0 1.1 1.3
needed”
Saving

35 on slide 16* 0.6 0.9 1.1 1.5 1.7 1.9 Post-retirement portfolio:
40 0.3 1.1 1.4 1.7 2.2 2.4 2.6 40/60 diversified portfolio

45 0.7 1.6 2.1 2.4 3.0 3.2 3.5 Inflation rate: 2.3%
50 1.1 2.3 2.8 3.2 3.9 4.1 4.5 Retirement age:
55 1.7 3.0 3.6 4.1 4.8 5.2 5.6
• Primary earner: 65
60 2.2 3.7 4.4 4.9 5.8 6.1 6.7 • Spouse: 63
65 2.5 4.1 4.9 5.5 6.5 6.9 7.5
Years in retirement: 35

This analysis assumes you would like to maintain an equivalent lifestyle in retirement.
Household income is assumed to be gross income (before taxes and savings).
How to use:
• Go to the intersection of your current age and your closest current household income.
• Multiply your current household income by the checkpoint shown. This is the amount you should have saved
today, assuming you continue contributions of 5% going forward.
• Example: For a 40-year-old with a household income of $50,000: $50,000 x 1.4 = $70,000

*Households age 25-35 earning $30k may need to save less than the 5% annual savings rate assumed in this analysis. If they were to save
5% annually going forward they would not need to have current assets to be on track. They should refer to the annual savings rate they need
to be saving today found on slide 16. This chart is for illustrative purposes only and must not be relied upon to make investment decisions.
J.P. Morgan Asset Management’s (JPMAM) model is based on proprietary Long-Term Capital Market Assumptions (first 10 years) and
equilibrium returns, and an 80% confidence level. Portfolios are described as equity/bond percentages (e.g., a 40/60 portfolio is 40%
equities and 60% bonds). Assumptions include household income replacement rates shown on slide 15. Consult with a financial
professional for a more personalized assessment. Allocations, assumptions and expected returns are not meant to represent JPMAM
performance. Given the complex risk/reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization
approaches in setting strategic allocations. References to future returns for either asset allocation strategies or asset classes are not
promises or even estimates of actual returns a client portfolio may achieve.
 Retirement savings checkpoints Household income ≥$100k
Annual savings rate: 10% GTR 14

Current household income

$100,000 $125,000 $150,000 $175,000 $200,000 $250,000 $300,000
Model assumptions
Current Annual gross savings rate:
Checkpoint (x current household income)
age 10%
25 0.1 0.3 0.5 0.7 0.8 1.0 1.2
Pre-retirement portfolio:
30 0.6 1.0 1.2 1.5 1.6 1.9 2.1 60/40 diversified portfolio
Saving

35 1.5 1.9 2.2 2.5 2.7 2.9 3.2 Post-retirement portfolio:

40 2.5 3.0 3.3 3.7 3.9 4.2 4.6 40/60 diversified portfolio

45 3.6 4.3 4.7 5.1 5.4 5.8 6.2 Inflation rate: 2.3%
50 5.0 5.8 6.3 6.7 7.1 7.6 8.0 Retirement age:
55 6.5 7.5 8.0 8.5 8.9 9.5 10.0
• Primary earner: 65
60 8.0 9.1 9.7 10.3 10.8 11.4 12.0 • Spouse: 63
65 9.3 10.5 11.1 11.8 12.3 13.0 13.7
Years in retirement: 35

This analysis assumes you would like to maintain an equivalent lifestyle in retirement.
Household income is assumed to be gross income (before taxes and savings).
How to use:
• Go to the intersection of your current age and your closest current household income.
• Multiply your current household income by the checkpoint shown. This is the amount you should have saved
today, assuming you continue contributions of 10% going forward.
• Example: For a 40-year-old with a household income of $100,000: $100,000 x 2.5 = $250,000

This chart is for illustrative purposes only and must not be relied upon to make investment decisions. J.P. Morgan Asset Management’s
(JPMAM) model is based on a blend of proprietary Long-Term Capital Market Assumptions (first 10 years) and equilibrium returns, and an
80% confidence level. Portfolios are described as equity/bond percentages (e.g., a 40/60 portfolio is 40% equities and 60% bonds).
Assumptions include household income replacement rates shown on slide 15. Consult with a financial professional for a more personalized
assessment. Allocations, assumptions and expected returns are not meant to represent JPMAM performance. Given the complex
risk/reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization approaches in setting strategic
allocations. References to future returns for either asset allocation strategies or asset classes are not promises or even estimates of actual
returns a client portfolio may achieve.
 Income replacement needs vary by household income GTR 15

Replacement rate detail by household income

98% 96% 94% 93% 92% 89% 88%

120% 86% 83% 80% 78% 76% 73% 72%
Income replacement rate
2%
Saving

100% 4% 6% 7% 8% 11% 12% 14% 17% 20% 22% 24% Changes in

27% 28% expenditures, taxes
80% and pre-retirement
savings

66% 61% 58% 55% 50% 47% 44% 37% 33% 28% 25% 20% 16% Social Security benefit
60% 73%

Amount required from

private and employer
40% sources

53% 56%
47% 50% 51%
46%
20% 39% 41% 42%
35% 37%
30% 33%
25%

0%
$30k $40k $50k $60k $70k $80k $90k $100k $125k $150k $175k $200k $250k $300k
Pre-retirement income

Source: J.P. Morgan Asset Management analysis, 2021. Household income replacement rates are derived from an inflation-adjusted analysis of: Consumer
Expenditure Survey (BLS) data (2016-2019) for income and longitudinal Chase data (2013-2020) for spending. Chase data includes internal select data from
JPMorgan Chase Bank, N.A. and its affiliates (collectively “Chase”) including select Chase check, cash, credit and debit card, and electronic payment
transactions from January 1, 2013 – December 31, 2020. Additional information on J.P. Morgan Asset Management’s data privacy standards available at
[placeholder for direct link]. Social Security benefits uses modified scaled earnings in 2021 for a single wage earner at age 65 and a spousal benefit at age 63.
The income replacement needs may be lower for households in which both spouses are working and the second spouse’s individual benefits are greater than
their spousal benefit. Single household income replacement needs may vary as spending is typically less than a two-spouse household; however, the loss of the
Social Security spousal benefit may offset the spending reduction. Percentages and values may not sum due to rounding.
 Annual savings needed if starting today Household income ≤$90k GTR 16

Current household income

Model assumptions
$30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000
Pre-retirement portfolio:
Current 60/40 diversified portfolio
Savings rate (x current household income)
age
Post-retirement portfolio:
25 3% 5% 5% 6% 7% 8% 8%
40/60 diversified portfolio
Saving

30 4% 6% 7% 8% 9% 10% 10%
Inflation rate: 2.3%
35 5% 8% 9% 10% 12% 13% 14%
Retirement age:
40 6% 10% 12% 14% 16% 17% 18%
• Primary earner: 65
45 9% 14% 17% 19% 22% 23% 25% • Spouse: 63
50 13% 21% 25% 28% 33% 35% 38% Years in retirement: 35

Values assume you would like to maintain an equivalent lifestyle in retirement.

Household income is assumed to be gross income (before taxes and savings).

How to use:
• Go to the intersection of your current age and your closest current household income.
• This is the percentage of your current household income to contribute annually going forward if
you have $0 saved for retirement today.
• Example: A 40-year-old with household income of $50,000 and $0 saved for retirement today may
need to save 12% every year until retirement.

This chart is for illustrative purposes only and must not be relied upon to make investment decisions. J.P. Morgan Asset Management’s
(JPMAM) model is based on a blend of proprietary Long-Term Capital Market Assumptions (first 10 years) and equilibrium returns, and an
80% confidence level. Portfolios are described as equity/bond percentages (e.g., a 40/60 portfolio is 40% equities and 60% bonds).
Assumptions include household income replacement rates shown on slide 15. Consult with a financial professional for a more personalized
assessment. Allocations, assumptions and expected returns are not meant to represent JPMAM performance. Given the complex
risk/reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization approaches in setting strategic
allocations. References to future returns for either asset allocation strategies or asset classes are not promises or even estimates of actual
returns a client portfolio may achieve.
 Annual savings needed if starting today Household income ≥$100k GTR 17

Current household income

Model assumptions
$100,000 $125,000 $150,000 $175,000 $200,000 $250,000 $300,000
Pre-retirement portfolio:
Current 60/40 diversified portfolio
Savings rate (x current household income)
age
Post-retirement portfolio:
25 10% 11% 12% 13% 13% 14% 15%
40/60 diversified portfolio
Saving

30 13% 14% 15% 16% 17% 18% 19%

Inflation rate: 2.3%
35 17% 19% 20% 21% 22% 23% 24%
Retirement age:
40 22% 25% 27% 28% 29% 31% 33%
• Primary earner: 65
45 31% 35% 37% 39% 41% 43% 46% • Spouse: 63
50 46% 52% 55% 59% 61% 65% 68%
Years in retirement: 35
Values assume you would like to maintain an equivalent lifestyle in retirement. Household income is
assumed to be gross income (before taxes and savings).

How to use:
• Go to the intersection of your current age and your closest current household income.
• This is the percentage of your current household income to contribute annually going forward if
you have $0 saved for retirement today.
• Example: A 40-year-old with household income of $100,000 and $0 saved for retirement today may
need to save 22% every year until retirement.

This chart is for illustrative purposes only and must not be relied upon to make investment decisions. J.P. Morgan Asset Management’s
(JPMAM) model is based on a blend of proprietary Long-Term Capital Market Assumptions (first 10 years) and equilibrium returns, and an
80% confidence level. Portfolios are described as equity/bond percentages (e.g., a 40/60 portfolio is 40% equities and 60% bonds).
Assumptions include household income replacement rates shown on slide 15. Consult with a financial professional for a more personalized
assessment. Allocations, assumptions and expected returns are not meant to represent JPMAM performance. Given the complex
risk/reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization approaches in setting strategic
allocations. References to future returns for either asset allocation strategies or asset classes are not promises or even estimates of actual
returns a client portfolio may achieve.
 Historical annual savings rate GTR 18

Personal savings rate

Annual, % of gross income Beware the wealth
effect
16% 2020:
Expansions 15% During economic
High inflation 1968-1984 Recessions expansions when the value
14% of stocks and homes
increase, Americans tend to
Saving

save less than during

12%
recessions.
2021:
11% Government help through
10%
the pandemic including
Average: 7.9% stimulus checks and
8% advance child tax credit
payments boosted savings
6% rates to levels not seen since
the 1970s.

4% On average, Americans are

saving well below the 10%-
15% consistent annual
2% savings rate required to
successfully fund
0% retirement.*
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
1960-61 1969-70 1973-75 1980-82 1990-91 2001 2007-09 2020
Fiscal Vietnam Oil Crisis Energy S&L Crisis Dot.com Financial Global
Tightening War Era Crisis Bust Crisis Pandemic

*Recommended savings rates are based on J.P. Morgan Asset Management’s analysis of median and affluent households.
Source: Bureau of Economic Analysis, National Bureau of Economic Research, J.P. Morgan Asset Management, as of December 31, 2021.
Personal savings rate is calculated as personal savings (after-tax income minus personal outlays) divided by gross income. Employer and
employee contributions to retirement funds are included in after-tax income but not in personal outlays, and thus are implicitly included in
personal savings.
 Benefit of saving and investing early GTR 19

Account growth of $200 invested/saved monthly

Saving fundamentals

Ending portfolio Saving early and often, and

$450,000 Consistent Chloe invests from investing what you save, are
ages 25 to 65 earning 6.25% $420,300 some of the keys to a
($96,000 total)
$400,000 77% successful retirement due to
the power of long-term
Saving

Late Lyla invests from ages

35 to 65 earning 6.25% compounding.
$350,000
($72,000 total)
$210,700
Quitter Quincy invests from
$300,000 ages 25 to 35 earning 6.25% 66%
($24,000 total)

$250,000 Nervous Noah saves from ages

$209,600
25 to 65 in cash earning 2.0%
89%
($96,000 total)
$200,000

$150,000 $147,900
35%

$100,000

$50,000
Investment return
Savings
$0
25 30 35 40 45 50 55 60 65
Age

The above example is for illustrative purposes only and not indicative of any investment.
Source: J.P. Morgan Asset Management, Long-Term Capital Market Assumptions. Compounding is the increasing value of assets due to
investment return earned on both principal and prior investment gains.
 Evaluate a Roth at different life stages GTR 20

Changes in lifetime taxable income

Hypothetical wage curve Tax diversification
Managing taxes over a
Next tax bracket lifetime requires a balance of
your current and future tax
pictures. Make income tax
diversification a priority to
Saving

1
have more flexibility and
Annual taxable income ($)

Pre-tax 401(k) /
control in retirement.
Traditional IRA*
Rule: Contributing to a
Roth early in your career
and shifting as your
Either / both RMDs income increases.

1. Roth 401(k) contributions

in peak earning years if
R 2 wealth is concentrated in
tax-deferred accounts.
Roth 401(k) or IRA
2. Proactive Roth conversions
in lower income retirement
years if RMDs
are likely to push you into
20 25 30 35 40 45 50 55 60 65 70 75 80
a higher bracket.
Age

Working years Retirement

*If eligible to make a deductible contribution (based on your MAGI). The illustration reflects savings options into Traditional and Roth IRA
accounts, as well as into pre-tax and Roth 401(k) accounts. RMD = Required Minimum Distributions, which are typically due no later than
April 1 following the year the owner turns 72 and are calculated every year based on the year-end retirement account value and the
owner/plan participant’s life expectancy using the IRS Uniform or Joint Life Expectancy Table. Employer contributions are typically pre-tax
and are subject to tax upon distribution.
The above example is for illustrative purposes only.
Source: J.P. Morgan Asset Management.
 Maximizing an HSA for health care expenses GTR 21

Health Savings Account (HSA) savings are triple tax advantaged1

Maximum family contribution with catch-ups, 6.25% return and 24% marginal tax rate Make the most of it
$300,000 If you are enrolled in a
qualified high-deductible
health plan and are eligible
Ending balance to contribute to a Health
$250,000
$242,450 Tax free for qualified Savings Account (HSA), be
Saving

health care expenses in retirement sure to open and fund your

HSA.
$200,000
$36,290 $91,230 Tax-deferred earnings Investing your HSA
Savings from tax
deductions
contributions for the long
$150,000 term and paying for current
health care expenses out of
income or short-term
savings can provide
$100,000
significant tax-free funds for
$151,220 Contributions with health care expenses in
catch-ups for the last 10 years retirement.
$50,000

$0
50 52 54 56 58 60 62 64
Age
1Must have a qualifying high-deductible health plan to make contributions. Funds in the HSA may be withdrawn tax free for qualified
medical expenses unless a credit or deduction for medical expenses is claimed. After age 65 funds also may be withdrawn for any reason
and taxed as ordinary income without penalty. Some health insurance premiums may be qualified expenses such as COBRA coverage,
coverage while receiving state or federal unemployment compensation, Medicare Part B and D premiums and qualified long-term care
(LTC) insurance premiums up to certain limits, but excludes Medigap/Medicare supplement policies and most hybrid products that
combine LTC with annuities and life insurance. See IRS Publications 969 and 502. This is not intended to be individual tax advice; consult
your tax professional.
The above example is for illustrative purposes only and not indicative of any investment. 2022 family contribution limit of $7,300 is adjusted
for inflation of 2.3% for 15 years with catch-up contributions of $1,000 per person starting at age 55 in 2027. Does not include account fees.
Present value of illustrated HSA after 15 years is $172,376. Estimated savings from tax deductions at a 37% marginal rate are $55,950.
Assumes cash or income used for health care expenses is not withdrawn from an account with a tax liability. The example assumes the HSA
is fully invested; if $2,000 was held in a cash account, the illustrated cumulative HSA account value would be $237,479. Individual 2022
contribution limit is $3,650. $242,440 is enough to fund about 13 years of projected average qualified Medicare-related health care
expenses for a couple.
 Diversified sources of retirement funding GTR 22

Included when calculating:

Account type Investment earnings/ Income taxes Social Security % taxed? Retirement funding
withdrawals owed? Medicare surcharges? sources are not created
Tax-free withdrawals equal
Health Savings (for qualified health care
Account expenses)1 Investment earnings and
withdrawals from tax-
advantaged accounts are
primary sources to fund
Roth 401(k)/IRA Tax-free withdrawals2 retirement spending needs.

When building a retirement

Spending

income plan, be aware of

Tax-exempt interest  sources that may be used to
determine:
Ordinary dividends
Taxable interest    Income taxes
Taxable Account  How much of a Social
Qualified dividends   Security benefit is subject
to tax
Realized capital gains    Additional required
Medicare premiums

Qualified withdrawals from

Roth or Health Savings
Pre-tax 401(k)/
Taxable withdrawals
(ordinary income)
  Accounts can provide tax-
Traditional IRA free funding that is not
included in the means-
testing of retirement-related
government benefits.

This is not intended to be individual tax advice; consult your tax professional.
1Must have a qualifying high-deductible health plan to make contributions. Funds in the HSA may be withdrawn tax free for qualified medical

expenses unless a credit or deduction for medical expenses is claimed. After age 65 funds also may be withdrawn at ordinary income tax
rates without penalty for any reason.
2Subject to 5-year Roth account holding period and age requirements.

Source: J.P. Morgan Asset Management.

 “The Prosperous Retirement”: theoretical spending profile GTR 23

Percentage of pre-retirement spending

100%

90% 20%-30%
Reduction in
spending Health care
80%
/LTC
??
70%
Spending

60%

Active Phase Passive Phase Final

FinalPhase
Phase
50% “Go-Go” “Slow-Go” “No-Go”
“No-Go”

40%

30%

20%

10%

0%
65 75 85

Source: The Prosperous Retirement: Guide to the New Reality, Michael K. Stein, CFP, 1998. pp. 16-18.
 Changes in spending GTR 24

Annual average household spending by age

Households with investable wealth of $1m - $3m What to expect
Average spending is highest
$120,000 $110,870 at midlife. Those at older
$114,580 Travel ages tend to spend less on
$106,360
all categories except health
Apparel & Services care and charitable
$100,000
$90,220
contributions.
Entertainment
$83,760
$80,430 Those who live to the oldest
$80,000 $77,300 Other ages may have costs related
Spending

to long-term care, which may

Transportation increase health care and
$60,000
housing costs.
Food & Beverage

Education
$40,000
Housing (includes
mortgage)
$20,000 Charitable
Contributions
Health Care
$0
45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 75 - 79 80 - 84 85 - 89 90 - 94 95+
Age

Source: J.P. Morgan Asset Management, based on internal select data from JPMorgan Chase Bank, N.A. and its affiliates (collectively
“Chase”) including select Chase check, credit and debit card, and electronic payment transactions from January 1, 2017 to December 31,
2019. Check and cash distribution: 2019 CE Survey, College Educated; J.P. Morgan Asset Management analysis. Information that would have
allowed identification of specific customers was removed prior to the analysis. Other includes: tax payments, insurance, gambling, personal
care and uncategorized items. Asset estimates for de-identified and aggregated households supplied by IXI/Equifax, Inc. Additional
information on J.P. Morgan Asset Management’s data privacy standards available at [placeholder for direct link]
 Changes in spending: partially and fully retired households GTR 25

Annual average household spending by age

Households with investable wealth of $1m - $3m

$102,390
$105,000
Travel
$93,950
$90,320 Apparel & Services
$90,000
$83,460 $83,920
$79,380 $79,990 Entertainment
$77,170
$75,000
Other
Spending

$60,000 Transportation

Food & Beverage

$45,000
Education

$30,000
Housing (includes
mortgage)
$15,000 Charitable Contributions

Health Care
$0
60 - 64 65 - 69 70 - 74 75 - 79 80 - 84 85 - 89 90 - 94 95+
Age

Source: J.P. Morgan Asset Management, based on internal select data from JPMorgan Chase Bank, N.A. and its affiliates (collectively
“Chase”) including select Chase check, credit and debit card, and electronic payment transactions from January 1, 2017 to December 31,
2019. Check and cash distribution: 2019 CE Survey, College Educated; J.P. Morgan Asset Management analysis. Information that would have
allowed identification of specific customers was removed prior to the analysis. Other includes: tax payments, insurance, gambling, personal
care and uncategorized items. Asset estimates for de-identified and aggregated households supplied by IXI/Equifax, Inc. Additional
information on J.P. Morgan Asset Management’s data privacy standards available at [placeholder for direct link]. Retired households
receive retirement income only, including Social Security, pension and/or annuity payments. Partially retired households receive both
retirement income and labor income.
 Spending and inflation GTR 26

Average annual spending by age and category 2017-2019 (excludes pandemic impact)
Take a long-term view
45.0% 41.6%
38.0% Housing, health care, food
35 - 44 75+
and beverage, transportation
and charitable contributions
30.0%
make up 84% of spending for
households age 75+.
14.2% 14.1% 15.5%
13.3%
15.0% 10.9% As a percentage of their
7.3% 7.1% spending, older households
2.7%
purchase more housing and
Spending

0.0% health care, but less of the

Housing Health care Food & beverage Transportation Gifts & charity* more variable food and
transportation categories.

All households may benefit

Annual average inflation by spending category from a long-term view of
inflation and how the basket
25.0%
21.4% of goods they are likely to
1982-2020 2021
purchase may change over
20.0%
time.
15.0%

10.0% 7.1%
5.1% 6.0%
4.7%
5.0% 2.2%
2.8% 2.7% 2.0% 2.7%
0.0%
Housing Health care Food & beverage Transportation Overall inflation

Source (top chart): Bureau of Labor Statistics (BLS), 2017-2019 annual average Consumer Expenditure Survey, college educated. 2017–2019
data is used to reflect spending behaviors over the long term; excludes pandemic impact. Additional spending categories for age 35-44 and
75+, respectively: entertainment, 6% and 5%; travel 4% and 4%; other 3% and 4%; apparel 4% and 2%; education 2% and 1%.
Source (bottom chart): BLS, Consumer Price Index (all urban consumers, seasonally adjusted), J.P. Morgan Asset Management.
 The 4% rule: projected outcomes vs. historical experience GTR 27

40/60 portfolio at various initial withdrawal rates Historical ending wealth at 4% initial
Projected nominal outcomes, 80th percentile withdrawal rate (1928-2021) Good in theory, poor in
65 rolling 30-year periods
practice
$1,200,000 The 4% rule
is successful for The 4% rule is the maximum
30 years but may >$0 85% initial withdrawal percentage
$1,000,000 not be sufficient that has a high likelihood of
for those with not running out of money
greater longevity >$1M 65%
after 30 years. It is not
$800,000 guidance on how to
Portfolio value

>$2M 45% efficiently use your wealth to

Spending

support your retirement

$600,000 lifestyle.
>$3M 32%
You may want to consider a
$400,000 dynamic approach that
>$4M 28% adjusts over time to more
effectively use your
$200,000 retirement savings.
>$5M 25%
$0
0 5 10 15 20 25 30 35 0% 20% 40% 60% 80% 100%
Years
4% 5% 6%

These charts are for illustrative purposes only and must not be used, or relied upon, to make investment decisions. Portfolios are described
as equity/bond percentages (e.g., a 40/60 portfolio is 40% equities and 60% bonds).
Right chart: The portfolio returns for the historical analysis are calculated based on 40% S&P 500 Total Return and 60% Bloomberg U.S.
Aggregate Total Return. Each portfolio's starting value is set at $1,000,000. Withdrawals are increased annually by CPI (CPI NSA Index).
Ending wealth at the end of each 30-year rolling period is in nominal terms.
Left chart: The hypothetical portfolio assumes All Country World Equity and U.S. Aggregate Bonds. J.P. Morgan Asset Management’s
(JPMAM) model is based on a blend of proprietary Long-Term Capital Market Assumptions (first 10 years) and equilibrium returns (25 years).
The resulting projections include only the benchmark return associated with the portfolio and do not include alpha from the underlying
product strategies within each asset class. The yearly withdrawal amount is set as a fixed percentage of the initial amount of $1,000,000
and is then inflation adjusted over the period (2.3%). Allocations, assumptions and expected returns are not meant to represent JPMAM
performance. Given the complex risk/reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization
approaches in setting strategic allocations. References to future returns for either asset allocation strategies or asset classes are not
promises or even estimates of actual returns a client portfolio may achieve.
 Dollar cost ravaging: timing risk of withdrawals GTR 28
Assumed annual return: 7.2%
Portfolio value over time 1966-2000
Assumes 5.2% initial withdrawal rate 40/60 portfolio: Actual annual return: 9.5% Sequence of return risk

$1,200,000 Withdrawing assets in down

markets early in retirement
$1,000,000
can ravage a portfolio.
$800,000 Consider investment
$600,000 solutions that incorporate
$400,000 downside protection such
as:
$200,000
$0 • Greater diversification
Spending

65 70 75 80 85 90 95 100 among non-correlated

Age asset classes

• Investments that use

options strategies for
Rate of return: actual vs. average 1966-2000 defensive purposes
Assumed annual return: 7.2%
40/60 portfolio: Actual annual return: 9.5% • Annuities with guarantees
30%
and/or protection
20% features

10%

0%

-10%
1966 1971
1970 1976
1975 1981
1980 1986
1985 1991
1990 1996
1995 2000

Assumptions (top chart): Retire at age 65 with $1,000,000 and withdraw 5.2% of the initial portfolio value ($52,000). Withdrawal amount
increased by 3.0% inflation each year (lower than the average inflation rate of the period between 1966-2000).
Source: J.P. Morgan Asset Management. Returns are based on a hypothetical portfolio, which is assumed to be invested 40% in the S&P 500
Total Return Index and 60% in the Bloomberg Capital U.S. Aggregate Index. The assumptions are presented for illustrative purposes only.
They must not be used, or relied upon, to make investment decisions. There is no direct correlation between a hypothetical investment and
the anticipated future return of an index. Past performance does not guarantee future results.
 Mitigating dollar cost ravaging: dynamic spending GTR 29

Portfolio value over time 1966-2000

Assumes 5.2% initial withdrawal rate Withdrawal dynamically adjusted based on performance Be flexible
Withdrawal annually increased by inflation
$1,000,000 Spending the same amount
in retirement grown by
$800,000 inflation regardless of how
$600,000 your portfolio is performing
can result in an
$400,000 unsuccessful outcome.
$200,000 Consider adjusting your
spending strategy based on
Spending

$0
market conditions to help
65 70 75 80 85 90 95 100
make your money last and
Age provide more total spending
through your retirement
Rate of return: 40% equity/60% bond portfolio 1966-2000 years.

30%

20%

10%

0%

-10%
1966 1971
1970 19751976 1981
1980 1986
1985 1991
1990 1996
1995 2000

Assumptions (top chart): Retire at age 65 with $1,000,000 and withdraw 5.2% of the initial portfolio value ($52,000). Fixed withdrawal
scenario assumes the withdrawal amount is increased by 3% inflation each year. Dynamic withdrawal scenario assumes that if the annual
return on portfolio is: 1) less than 5%, withdrawal remains the same as the prior year; 2) between 5% and 10%, withdrawal is increased by
inflation (3%); 3) greater than 10%, withdrawal is increased by 4%. While the dynamic withdrawal scenario during this historical period
provided 21% more total spending in today’s dollars, it is for illustrative purposes only and may not be successful during other time periods.
Source: J.P. Morgan Asset Management. Returns are based on a hypothetical portfolio, which is assumed to be invested 40% in the S&P 500
Total Return Index and 60% in the Bloomberg Capital U.S. Aggregate Index. The assumptions are presented for illustrative purposes only.
They must not be used, or relied upon, to make investment decisions. There is no direct correlation between a hypothetical investment and
the anticipated future return of an index. Past performance does not guarantee future results.
 Health care costs for retirees before age 65 GTR 30

2022 Marketplace1 plan monthly cost estimate per person: non-smoker, age 64
Cost will vary by
Silver Plan
(premium covers about 70% of costs for all enrollees in a plan) geography and age. For
your estimate:
https://www.kff.org/interactive
Nationwide Average $1,027 $308 $1,335 /subsidy-calculator/

High $1,257 $377 $1,634 Tax credits were expanded to

include more households
Low $617 $185 $802 through 2022.

$0 $500 $1,000 $1,500 $2,000 Subsidies that limit out-of-

Spending

pocket costs are usually

Bronze Plan incorporated into
(premium covers about 60% of costs for all enrollees in a plan) Marketplace Silver Plans for
those who have Modified
Nationwide Average $772 $309 $1,081 Adjusted Gross Income
(MAGI) below $32,200
High $1,022 $409 $1,431 individual / $43,550 couple.

Low $458 $183 $641 For those who do not qualify

for a tax credit or a subsidy,
$0 $500 $1,000 $1,500 $2,000 be sure to compare Gold and
Bronze Plans to Silver Plans
Premium Out-of-pocket estimate (average) purchased directly from the
insurer.

1Health insurance plans available through Healthcare.gov.

Not meant to be personal or tax advice. Does not include subsidies or tax credits that usually limit premium cost to 8.5% of income. In 2021
and 2022, premium tax credits were expanded per the American Rescue Plan Act (ARPA). In 2023 the tax credit is scheduled to revert to pre-
2021 criteria, which requires MAGI (Modified Adjusted Gross Income) less than $51,520 individual / $69,680 couple. Subsidies that reduce
out-of-pocket maximums may be available for those with a Silver Plan. A qualifying plan will allow you to make contributions to a Health
Savings Account (HSA). When searching for a qualifying plan on the Marketplace website, look for the HSA eligible flag in the upper left-hand
corner or use the filter option in the right-hand corner. Qualifying plans may provide less coverage; be sure to evaluate trade-offs, especially
if you are eligible for a premium subsidy.

Source: Healthcare.gov, Kaiser Family Foundation subsidy calculator as of December 7, 2021, https://www.kff.org/interactive/subsidy-
calculator/. Low costs shown above are for zip code 11217 in Brooklyn, New York, and high costs are for zip code 32320 in Apalachicola,
Florida. Subsidy information from Kaiser Family Foundation website as of December 7, 2021.
 Marketplace plan costs usually increase with age GTR 31

2022 Marketplace Silver plan monthly cost per person: non-smoker, national average
Understand costs
specific to your situation
$1,500
Marketplace plan insurers
$1,335 typically charge older
individuals more than
$1,208 younger ones.
$1,200 $308
To account for age-related
$279 increases plus inflation, use
$993
an annual cost increase of
Spending

$900 6.0% for health care costs

$229
$796 prior to Medicare eligibility.

Cost trends and increases

$184
due to age vary by
$600 geography. For more
$1,027 information:
$929 https://www.kff.org/interactive
/subsidy-calculator/
$764
$300 $612

$0
Age 50 Age 55 Age 60 Age 64

Premium Out-of-pocket estimate (average)

This is not meant to be personal advice. For information about your options, go to Healthcare.gov.
Source: Healthcare.gov, Kaiser Family Foundation subsidy calculator as of December 6, 2021, https://www.kff.org/interactive/subsidy-
calculator/
 Three steps for Medicare coverage GTR 32

1 Sign up for Part A and B on Medicare.gov

Medicare details
Part B: Individuals who have paid
Part A:
(inpatient hospital insurance) + (insurance that covers doctor visits, tests and Medicare taxes for 10 years
outpatient hospital visits) (and their spouses who are
age 65 or older) are eligible
Insurance for out-of- for Medicare at age 65.
pocket expenses Vision, dental and
hearing coverage & Enroll during your Initial
2 Choose your plan related to Drug coverage
other benefits Enrollment Period (3 months
Parts A & B
before and 3 months after
Spending

Option 1 your 65th birthday month) or

Sign up for
Not included.
Original Medicare
accepted by all  Medigap
(also called
 Part
Choose a
D plan
Χ You may buy a
face lifetime penalties.
separate policy Sign up the month before the
Medicare providers “supplemental”)
month you turn age 65 to
Option 2 avoid coverage gaps.
Not included. Check details:
Medicare Advantage/ Usually
Part C limited to a Χ Be prepared
for variable
 included  benefits vary by Re-evaluate your choice
during open enrollment
plan
network of providers
costs October 15 through
December 7 each year.
3 Prepare for additional expenses
 Out-of-pocket drug expenses aren't covered
 Need income or savings for these costs; costs can change as your health changes
 Medicare does not cover most long-term care costs
 Custodial care for activities of daily living is not covered
 Medicaid may pay for long-term care if you have few assets and low income1

For help, visit the Medicare Rights Center at www.medicarerights.org or your State Health Insurance
Assistance Program (SHIP) at www.shiptacenter.org.

1Medicare does pay for medically necessary skilled nursing facility or home health care with strict requirements that are difficult to meet on

a limited basis and for some hospice care. If you transfer assets to others there is a five-year “look back” where the government will recover
the assets transferred if you go on Medicaid. This is not personal advice. Consult an eldercare attorney if you have questions.
Source: Medicare.gov as of December 31, 2021; J.P. Morgan Asset Management analysis.
 65 and working: should I sign up for Medicare? GTR 33

Assumes adequate employer coverage and qualification for Medicare at age 651
Avoid coverage gaps
Sign up for Medicare and stop monthly HSA contributions3 and penalties
START • Enroll in Medicare the month before the month you turn 65 to avoid
Creditable coverage is key.
gaps in coverage.
HERE Late enrollment penalties will
• Stop monthly HSA contributions to avoid tax penalties. apply if you don’t have
creditable coverage and
Check with your employer: Do don’t sign up in your
you have creditable coverage enrollment window (3
Sign up for Part A
for major medical and drugs?2
• Part A is free for people who paid payroll taxes for 40 quarters (10 months before to 3 months
Spending

Y N years) and employer coverage is usually primary. after your 65th birthday
• If you want to contribute to an HSA in the future, do not sign up for
month).
Social Security benefits and disenroll from Part A.3
COBRA coverage (a
Do you contribute to a Health
temporary extension of
Savings Account (HSA)?
major medical employer
Y N Do not sign up for Medicare coverage when work stops)
• HSA contributions while on Medicare will result in tax penalties.4 is not creditable, although
some extended prescription
Have you filed or will you file for coverage may be creditable
Social Security benefits within 6 (ask for documentation).
months? Stop HSA contributions and opt out of Medicare Part B
• Once you start Social Security benefits, you will automatically be
Y N enrolled in Part A, retroactive to the lesser of six months or age 65.
• Tax penalties apply if you are enrolled in Part A and contribute to an
HSA.4 Contact Medicare.gov to opt out of Part B.

1Assumes Part A is no cost (generally for people who paid payroll taxes for 40+ quarters or are married to a beneficiary who did so). Some
individuals may choose to sign up for Part A and Part B earlier than shown if they want additional coverage.
2Ask your employer for documentation of creditable coverage for major medical and for drug coverage. Employer coverage for less than 20
people is usually not creditable and will end at age 65 or become secondary after Medicare has paid.
3To disenroll you must have an interview with the Social Security Administration and use Form CMS 1763. When you sign up for Part A again or
sign up for Social Security, coverage may be retroactive for up to 6 months. You will be unable to disenroll if you are receiving Social Security.
4Total HSA contributions for the year in excess of the maximum contribution for the year divided by the number of months you are eligible to
make contributions will result in tax penalties (6% of the excess contribution each year). This is not intended to be individual tax advice;
consult your tax professional.
For more information, see www.mymedicarematters.org/enrollment/am-i-eligible, sponsored by the National Council on Aging.
Source: IRS Publication 969, National Council on Aging and Medicare.gov websites as of December 31, 2020; J.P. Morgan Asset
Management analysis.
 Rising health care costs in retirement GTR 34

Original Medicare costs in retirement (in 2022 dollars)

Monthly amount per person A growing concern
$1,600 Annual expenses per person
$1,475 in 2022 are $6,096.

$174 Given variation in health care

Uncertainties (health care cost inflation from year to
$1,301
inflation variability, Medicare year, it may be prudent to
$1,200 solvency issues) assume an annual health
$378 care inflation rate of 6.0%,
Part B premiums (doctors, tests & which may require growth as
Spending

outpatient hospital insurance) well as current income from

your portfolio in retirement.
6.0% Part D premiums & average
$800 $266 prescription out-of-pocket costs
5.6%
Other out-of-pocket costs
• Vision, dental & hearing
$508 $192
• Part A & B deductibles not
covered by Medigap
$400 $170
Medigap Plan G (optional
$110 supplemental policy to fill in
$465 gaps of Parts A & B)
$101

$127
$0
Age 65 (2022) Age 95 (2052)

In 2022 dollars

Estimated future value total average monthly cost at age 95 is $2,917. Today’s dollar calculation used a 2.3% discount rate to account for
overall inflation. Medigap premiums typically increase with age, in addition to inflation, except for the following states: AR, CT, MA, ME, MN,
NY, VT, WA. For local information, contact the State Health Insurance Assistance Program (SHIP) https://www.shiptacenter.org/. Plan G
premium is nationwide average for non-smokers. If Plan G is not available, analysis includes the most comprehensive plan available.
Source: HealthView Services proprietary data file received January 2022 used by permission.
 2022 Monthly Medicare surcharges GTR 35

The surcharge amount is the same for all income levels within a band
If you go over a threshold, you pay the additional premium for that band Surcharge details
There may be a bigger impact
for singles and surviving
Modified Adjusted Gross Income
spouses: Medicare
based on 2020 tax year filing1
surcharge thresholds for
Additional monthly premium amount singles are half of the
per person thresholds for couples.
Filing single Filing jointly Parts B & D in 2022
Couples are less likely to be
affected unless they have
Spending

$91,001 - $114,000 $182,001 - $228,000 $80 significant pensions, work or

rental income.

Filing an appeal?
$114,001 - $142,000 $228,001 - $284,000 $202 If you have stopped work
or you have lower income
due to circumstances
outside of your control,
$142,001 - $170,000 $284,001 - $340,000 $324
you might be eligible for an
appeal. See form SSA-44 for
details:
$170,001 - $499,999 $340,001 - $749,999 $446 https://www.ssa.gov/forms/
ssa-44-ext.pdf

$500,000 or more $750,000 or more $486

$0 $200 $400 $600

1The Social Security Administration uses the most recent federal return supplied by the IRS. If you amended your return in a way that
changes your surcharge amount, you may need to contact your Social Security office.
Source: Medicare.gov as of December 7, 2021.
This is not meant to be personal tax advice. Please consult your tax professional for specifics for your situation. Modified Adjusted Gross
Income (MAGI) for purposes of calculating Medicare surcharges is Adjusted Gross Income (AGI) plus tax-exempt interest income.
Thresholds increase each year with inflation starting in 2020, except the top threshold, which was added in 2019; this top threshold is set to
annually inflate starting in 2028.
 Long-term care planning GTR 36

Lifetime probability of needing assistance with two or more activities of daily living
75%
Create a care plan
80%
64% Men Women The value of care from family
60% and friends is roughly equal
to paid care. An adult child
40% 33% 34%
26% 24% caring for a parent is seven
20% 20% times more likely than an
20%
3% 6% individual providing care for
their spouse.
0%
Any type Only unpaid care Paid home care Nursing home Assisted living Women are more likely to
Spending

(family / friends) require care and need more

years of paid care if paid
May use more than 1 type of paid care
care is used.

A care plan may help you

Providers of unpaid eldercare Duration of paid care age 65+ if paid care is used avoid burdening others,
ensure your family
60% 45%
Men Women 43% understands your wishes
51% 37% and allow you to have more
35%
33% control over your care.
40% 30% 27% 26%
27%
23%
20%
7% 15%

0%
0%
< 3 years 3-5 years 5+ years

Long-term care includes needing help with two or more activities of daily living such as eating, dressing, bathing, transferring, and toileting
or severe cognitive impairment. For the top chart, nursing home stays of less than 90 days are excluded because they may include recovery
from injuries. Unpaid caregivers may care for more than 1 person.
Source: U.S. Department of Health and Human Services, ASPE Issue Brief, April 2019, What is the long-term risk of needing and receiving
long-term services and supports, Table 3; U.S. Government Accountability Office, GAO-19-382, Retirement Security, Some Parental and
Spousal Caregivers Face Financial Risk, May 2019, Figure 1; U.S. Department of Health and Human Services, APSE Brief, January 2021, Long-
term Services and Supports for Older Americans, Risks and Financing, 2020, Table 1. Latest data available as of December 31, 2021.
 Disability incidence increases with age GTR 37

Percentage of age 65+ population who need assistance with two or more activities of
daily living or have severe cognitive impairment Spending may shift to
long-term care needs at
50% 48% older ages
Nearly half of those who
survive to the oldest ages
40% meet the definition of having
long-term care needs. While
it is encouraging that the
other half of this population
Spending

30% does not meet the criteria,

30% some of these individuals
may require at least some
assistance.
22%
Changing abilities may
20% require spending on long-
term care services, a move to
be closer to children, home
12% modifications or a different
10% housing arrangement.
7%
5%

0%
65 - 69 70 - 74 75 - 79 80 - 84 85 - 89 90+
Age

HIPPA qualifying long-term care includes needing help with two or more activities of daily living such as eating, dressing, bathing,
transferring and toileting or severe cognitive impairment for at least 3 months.
Source: Spillman, Brenda C., Allen, Eva H., and Melissa Favreault. 2021: Informal Caregiver Supply and Demographic Changes: Review of the
Literature. Urban Institute report to the Department of Health and Human Services, Assistant Secretary for Planning and Evaluation, Office of
Behavioral Health, Disability, and Aging Policy, December 2020. Located at https://aspe.hhs.gov/reports/informal-caregiver-supply-
demographic-changes-review-literature. Derived from data from Figure 2, National Health and Trends Study (NHATS) 2015 data.
 Median cost of a home health aide GTR 38

The cost of care

WA The median cost for a home
ME health aide is $27 an hour
MT ND but can vary widely. While the
VT most common starting point
OR
MN NH for care is at home, it may
ID
WI NY MA
SD
CT
progress to other settings.
WY MI RI
PA The national annual median
IA
NE NJ
Spending

NV
OH cost for a private room in a
IL IN DE
UT nursing home is $108,400.
CA CO WV MD
VA These costs are commonly
KS MO KY between $90,000 and
NC $145,000 but may be lower
TN
OK or higher. For costs specific
AZ
NM AR SC to your area:
www.genworth.com/costofcare
MS AL GA

TX LA
AK
AK FL

HI

$19 - $22 $23 - $25 $26 - $28 $29 - $31 $32 - $36
Cost per hour

Source: Genworth Cost of Care Survey 2021, conducted by CareScout®, July-Sept., 2021. © 2021 Genworth Financial, Inc. All rights reserved.
Methodology document: Genworth Cost of Care Summary Findings and Methodology. Costs vary within states. Median values are rounded
to the nearest dollar. Annualized median cost inflation for home health aides from 2004 to 2020 was 1.9%; 2019-2020 was 4.4%. Annualized
median cost inflation for a private room in a nursing home from 2004 to 2020 was 3.1%; 2019-2020 was 3.6%. For more information on the
cost of care in your location, see the Genworth website: www.genworth.com/costofcare.
J.P. Morgan Asset Management analysis: Consider using an annual inflation rate of 3.8% when planning for these costs.
 Long-term care planning options GTR 39

Consider utilizing more than one option

Start planning early

Family • Will you want to move

Family and friends may provide some assistance closer to your family?
or help coordinate care Medicaid:
• If insurance affordability is
After exhausting an issue, is it feasible to
other options buy less coverage and
Savings
combine it with other
Savings may fund paid care; some expenses such as travel may
go down Rules to qualify vary solutions?
Spending

by state but
generally you must • Are you saving in a Health
be low income with Savings Account (HSA)?
Insurance few assets to qualify1
Options include traditional long-term care insurance, combination HSAs may be used tax free
life and annuity products, life insurance for a surviving spouse for qualified expenses or
and deferred annuities for income late in life after tax without penalty
after age 65 for non-
qualified expenses.3
Life plan communities
Also known as Continuing Care Retirement Communities, this
option starts with independent living and offers additional • If you want care at home,
services or facilities when needed (costs and services vary).2 More consider how you will
information: https://www.mylifesite.net/ remain socially connected
and the potential costs of
Home equity doing so.
Second homes may be sold; the home equity in your primary
residence may be used if your other options are limited; credit
availability and home values may fluctuate

1If
you transfer assets to others, there is a five-year “look back” where the government will recover the assets transferred if you go on
Medicaid. This is not personal advice; consult an Elder Care attorney if you have questions about Medicaid, Medicaid qualifications and
look-back rules.
2There are about 1,900 Life Plan Communities (LPCs) in the United States according to Zeigler and Company.
3HSAs may be used to fund qualified traditional long-term care policy premiums up to certain limits. Necessary home improvements may
qualify if they don’t improve the value of your home. Services for chronically ill individuals who are unable to perform two or more activities
of daily living or who have severe cognitive impairment may be qualified if they are part of a prescribed plan from a licensed practitioner.
For a list of qualified expenses, see IRS Publication 502 or consult your tax professional; this is not meant to be personal tax advice.
Source: J.P. Morgan Asset Management, latest available data as of December 13, 2021.
 Goals-based wealth management GTR 40

Short-term goals Medium-term goals Long-term goals

Includes emergency reserve 5-10 years, e.g., college, home 15+ years, e.g., retirement Divide and conquer
fund of total spending needs
for 3-6 months Aligning your investment
strategy by goal can help you
take different levels of risk
Cash & cash Equities Equities based on varying time
equivalents Bonds Bonds horizons and make sure you
are saving enough to
accomplish all of your goals
– not just the ones that occur
first.
Investing

Range of stock, bond and blended total returns

Annual total returns, 1950-2021 Equities Bonds 50/50 Cash
60%
47%
43%
33%
40%
28% 23% 17%
14% 21% 19% 16% 16% 14%
20% 11% 12%
9% 8%
0%
6% 1% 5%
0% -3% -2% 1% 0% -1% 1% 2% 0% 1%
-20% -8%
-15%
-40%
-39%
-60%
1 year 5-year rolling 10-year rolling 20-year rolling

Source (top chart): J.P. Morgan Asset Management.

Source (bottom chart): Bloomberg, FactSet, Federal Reserve, Robert Shiller, Strategas/Ibbotson, J.P. Morgan Asset Management.
Returns shown are based on calendar year returns from 1950 to 2021. Stocks represent the S&P 500 Shiller Composite and Bonds represent
Strategas/Ibbotson for periods from 1950 to 2010 and the Bloomberg Aggregate thereafter. Cash represents the U.S. 90 Day Treasury Bill
Total Return.
Portfolio allocations are hypothetical and are for illustrative purposes only. They were created to illustrate different risk/return profiles and
are not meant to represent actual asset allocation.
 Structuring a portfolio in retirement: the bucket strategy GTR 41

Time-based
$
segmentation
Investment income Aligning your time horizon
& distributions with an investment approach
may help you to be more
$ comfortable with maintaining
diversified portfolio
allocations in retirement.
Investment risk

For the near-term portfolio,

consider maintaining:
Year 3
 Funds to cover 1-3 years
Year 2 worth of the gap between
Year 1
Equities your income and spending
Investing

Bonds
needs
Cushion
 A cushion for unexpected
Alternatives*
expenses
$
Cash and cash
equivalents
Spending

Portfolio time horizon

1 year 15+ years

Near-term Intermediate-term Longer-term &

needs needs legacy needs

For illustrative purposes only. Source: J.P. Morgan Asset Management. Bonds are subject to interest rate risks. Bond prices generally fall
when interest rates rise. The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s
financial condition, sometimes rapidly or unpredictably. Equity securities are subject to stock market risk, meaning that stock prices in
general may decline over short or extended periods of time. Investing in alternative assets involves higher risks than traditional investments
and is suitable only for the long term. They are not tax efficient and have higher fees than traditional investments. They may also be highly
leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain.
*Equity, fixed income and cash are considered traditional asset classes. The term “alternative” describes all non-traditional asset classes.
They include private and public equity, venture capital, hedge funds, real estate, commodities, distressed debt and more.
 Structuring a portfolio to match investor goals in retirement GTR 42

Building your plan

37
Considerations Potential solutions It may be useful to match
dependable income sources
What is the time horizon Growth-oriented portfolios with regular retirement
and appropriate planning spending, while coordinating
Capital preservation strategies income-oriented solutions and
vehicle for your heirs and your
estate goals? Alternatives* a cash reserve to meet more
variable expenses.
Legacy

Cash and cash equivalents

How much of your total Variable
spending varies month spending
to month?
Investing

Income distributed from:

• Dividend-paying stocks/funds
• Fixed income securities/funds
How much do • Multi-asset solutions
you regularly Stable Protected lifetime income
spend each
month?
spending
Pension

Social Security

For illustrative purposes only. Fixed income is subject to interest rate risk. Fixed income prices generally fall when interest rates rise. The
price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes
rapidly or unpredictably. Investing in alternative assets involves higher risks than traditional investments and is suitable only for the long
term. They are not tax efficient and have higher fees than traditional investments. They may also be highly leveraged and engage in
speculative investment techniques, which can magnify the potential for investment loss or gain.
*Equity, fixed income and cash are considered “traditional” asset classes. The term “alternative” describes all non-traditional asset classes.
They include private and public equity, venture capital, hedge funds, real estate, commodities, distressed debt and more.
Source: J.P. Morgan Asset Management.
 Retirement profiles by planning outcome GTR 43

Retirement investable wealth profiles and diversified portfolio priorities

Align your objective with
your outcome
Retirement can mean several
goals for your portfolio –
Increasing Wealth: current income, growth,
Investment return exceeds sustainable withdrawals
spending needs and/or protected income.
Priority: Total return
To find the right balance,
your projected outcome from
your retirement plan can
Preserve Principal: help you identify which of
Retirement Spend investment return only
(income and/or appreciation)
these to consider making a
Wealth

Priority: Current income priority for your diversified

Investing

portfolio.

Spend Principal:
Access both investment return and
a portion or all principal
Priorities:
• Dynamic withdrawal strategy
• Protected lifetime income
• A combination of both

Age

Source: J.P. Morgan Asset Management; Minney, Aaron. “Adding Direction to the Consumption Rate in Retirement.” Journal of Retirement,
Summer 2017, page 108.
 Impact of being out of the market GTR 44

Returns of the S&P 500

Performance of a $10,000 investment between January 1, 2002 and December 31, 2021 Plan to stay invested
$70,000 Losses hurt more than gains
feel good. Market lows can
9.52% result in emotional decision
$60,000 making.
$61,685 Seven of the best 10 days occurred within two weeks of
the 10 worst days Taking “control” by selling
• Six of the seven best days occurred after the worst days
out of the market after the
$50,000 • The second worst day of 2020 — March 12 — was
worst days is likely to result
immediately followed by the second best day of the year
in missing the best days that
follow. Investing for the long
$40,000
term in a well-diversified
portfolio can result in a
5.33% better retirement outcome.
$30,000
Investing

$28,260

$20,000
2.63%
$16,804 0.43%
$10,000
$10,904 -1.51%
-3.25% -4.85%
$7,372
$5,162 $3,698
$0
Fully Missed 10 Missed 20 Missed 30 Missed 40 Missed 50 Missed 60
Invested best days best days best days best days best days best days
Source: J.P. Morgan Asset Management analysis using data from Bloomberg. Returns are based on the S&P 500 Total Return Index, an
unmanaged, capitalization-weighted index that measures the performance of 500 large capitalization domestic stocks representing all
major industries. Indices do not include fees or operating expenses and are not available for actual investment. The hypothetical
performance calculations are shown for illustrative purposes only and are not meant to be representative of actual results while investing
over the time periods shown. The hypothetical performance calculations are shown gross of fees. If fees were included, returns would be
lower. Hypothetical performance returns reflect the reinvestment of all dividends. The hypothetical performance results have certain
inherent limitations. Unlike an actual performance record, they do not reflect actual trading, liquidity constraints, fees and other costs. Also,
since the trades have not actually been executed, the results may have under- or overcompensated for the impact of certain market factors
such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of
hindsight. Returns will fluctuate and an investment upon redemption may be worth more or less than its original value. Past performance is
not indicative of future returns. An individual cannot invest directly in an index. Data as of December 31, 2021.
 Tax implications for retirement savings by account type GTR 45

Contributions1 Investment growth Withdrawals

Pre-tax 401(k) /
Traditional IRA
(Taxed as ordinary income)
Retirement accounts:
Taxes generally apply
Roth 401(k) /
to contributions or
Roth IRA
(For qualified withdrawals) withdrawals. Most
withdrawals must
be qualified to avoid
After-tax 401(k) / tax penalties.2
non-deductible
Traditional IRA (Investment returns taxed
as ordinary income)
If not used for qualified
health care expenses,
Defined Contribution

Health Savings withdrawals after age 65

Account (HSA)3 will be taxed as ordinary
(For qualified health
income (without penalty).
care expenses)

Preferential tax treatment Subject to taxes

Federal taxes; states may differ. This is not intended to be individual tax advice. Consult your tax professional.
1Income and other restrictions may apply to contributions. Tax penalties usually apply for early withdrawals. Qualified withdrawals are

generally those taken over age 59½; qualification requirements for amounts converted to a Roth from a traditional account may differ; for
some account types, such as Roth accounts, contributions that are withdrawn may be qualified. See IRS Publications 590 and 560 for more
information. 2Withdrawals from after-tax 401(k) and non-deductible IRAs must be taken on a pro-rata basis including contributions and
earnings growth. For non-deductible IRAs, all Traditional IRAs must be aggregated when calculating the amount of pro-rata contributions
and earnings growth. 3There are eligibility requirements. Qualified medical expenses include items such as prescriptions, teeth cleaning
and eyeglasses and contacts for a medical reason. Cosmetic procedures, such as teeth whitening, and general health improvement, such
as gym memberships and vitamins, are not qualified expenses. A 20% tax penalty applies on non-qualified distributions prior to age 65.
After age 65, taxes must be paid on non-qualified distributions. See IRS Publication 502 for details.
Source: J.P. Morgan Asset Management.
 Prioritizing long-term retirement savings GTR 46

Getting started
9 Taxable account
Start with emergency
savings and make sure to
8 IRA3 take advantage of employer
matching funds if they are
available.
Pay down lower interest loans
7 (such as student loans with interest < 6.25%)2 An HSA offers triple tax
Prioritizing savings

benefits if used for qualified

medical expenses in
6 Additional Defined Contribution savings
Maximize retirement. Prioritize
contribution contributions to an HSA
5 Additional HSA (Health Savings Account)1 before a Defined
Contribution plan if current
medical expenses can be
Pay down higher interest loans funded from low-cost
4 (such as credit card debt / student loans with interest > 6.25%)2 sources.4
Defined Contribution

Defined Contribution savings to maximize employer match

Maximize 3 (if available)
employer
match
2 HSA (Health Savings Account) if eligible for match1

Start here 1 Emergency reserve (3 – 6 months of living expenses)

1Must have a high-deductible health insurance plan that is eligible to be paired with an HSA. Those taking Social Security benefits age 65 or

older and those who are on Medicare are ineligible. Tax penalties apply for non-qualified distributions prior to age 65; consult IRS
Publication 502 or your tax professional.
2This assumes that a diversified portfolio may earn 6.25% over the long term. Actual returns may be higher or lower. Generally, consider

making additional payments on loans with a higher interest rate than your long-term expected investment return.
3Income limits may apply for IRAs. If ineligible for these, consider a non-deductible IRA or an after-tax 401(k) contribution. Individual

situations will vary; consult your tax professional.

4Examples of low-cost funding sources include cash and current income.

Source: J.P. Morgan Asset Management analysis. Not intended to be a personal financial plan.
 The benefits of auto-escalation GTR 47

Account growth from contributions, employer match and investment returns

Model assumptions
$2,000,000 Start age: 25
Ending portfolio

Super Sam starts and stays at Retirement age: 65

$1,800,000 9%
10% contribution Starting salary: $50,000
19%
$1,600,000 $1.8M
Wage growth: 2.3%
Escalating Ethan starts at 3% 72%

$1,400,000 contribution, increasing 1% Assumed annual employer

annually until capping at 10% match: 100% of employee
contribution up to 5%
$1,200,000 10%
Investment return: 6.25%
Portfolio

Stubborn Sara starts and stays at 20%

$1,000,000 3% contribution $1.6M
70%

$800,000
Defined Contribution

$600,000 14%

14%
$400,000 $720K
72%

$200,000

Return
$0
25 30 35 40 45 50 55 60 65 Contribution
Age Employer match

Individual is assumed to retire at the end of age 65. Growth of portfolio is tax deferred; ending portfolio may be subject to tax. The above
example is for illustrative purposes only and not indicative of any investment.
Source: J.P. Morgan Asset Management, Long-Term Capital Market Assumptions.
 The toxic effect of loans and withdrawals GTR 48

Growth of 401(k) investment

Mitigate the effects of
$2,000,000 loans
Constant contributions portfolio $1,670,200
$1,600,000 If taking a loan from your
Portfolio with loans and withdrawals 27% less
401(k) is unavoidable, try to
$1,200,000 $1,215,800
mitigate the impact by
$800,000 continuing contributions
while repaying the loan. It is
$400,000 especially important to
ensure you continue to
$0 receive an employer match,
25 30 35 40 45 50 55 60 65 if available.
Age

Assumed cash flows: 401(k) contributions, loans and withdrawals

Contributions: 5% Match: 5% Constant contributions: 10% Loan Withdrawal
Defined Contribution

20%

10%
As a % of salary

0%

-10% Loan Loan

repayment repayment
-20%

-30%
25 30 35 40 45 50 55 60 65
Age

Source: J.P. Morgan Asset Management. For illustrative purposes only. Hypothetical portfolio is assumed to be invested 60% in the S&P 500
and 40% in the Bloomberg Capital U.S. Aggregate Index from 1981 to 2021. Starting salary of $30,000 increases by 2.3% each year. Loan and
withdrawal amounts are assumed to be $10,000. Loan interest rate is assumed to be 7.5% and is paid off over 4 years.
 Traditional IRAs vs. Roth IRAs: 2021/2022 GTR 49

Traditional IRA Roth IRA

Maximum • $6,000 (earned income) • $6,000 (earned income)
contribution • $7,000 (age 50 and over)1 • $7,000 (age 50 and over)1
2022 • Reduced by Roth IRA contributions • Reduced by Traditional IRA contributions
Tax-deductibility If you or your spouse is covered by a retirement plan at work, tax Contributions are non-deductible; employer plan coverage does
income limits deductibility of contributions phases out at these income levels: not change the contribution phase-out limits:
(Traditional IRA) 2021 Single: $66,000-$76,0002 2021 Single: $125,000-$140,000
and contribution Married: $105,000-$125,0002 Married: $198,000-$208,000
income limits 2022 Single: $68,000-$78,0002 2022 Single: $129,000-$144,000
(Roth IRA) Married: $109,000-$129,0002 Married: $204,000-$214,000

Federal tax • Investment growth is tax deferred and contributions may be • Taxes are due upon conversion of account balances not yet taxed.
treatment tax deductible. Deductible contributions and investment gains
• Qualified withdrawals of contributions at any time are tax free and
are taxed as ordinary income upon withdrawal.
IRS penalty free; converted amounts may be withdrawn tax free.3
• If non-deductible contributions have been made, each
• Qualified withdrawals of earnings are tax free and IRS penalty free
withdrawal is taxed proportionately on a pro-rata basis, taking
if taken after five years have passed since the account was initially
into consideration all contributions made to all Traditional
funded and the account owner is age 59½ or older (other
IRAs owned.
exceptions may be applicable).
• Multiple Roth IRAs are considered one Roth IRA for withdrawal
purposes and distributions MUST be withdrawn in a specific order
deemed by the IRS that applies regardless of which Roth IRA is
used to take that distribution.
Reference

Early withdrawals Early withdrawals before age 59½ are generally subject to a 10% IRS penalty unless certain exceptions apply.

Mandatory By April 1 of the year after turning 72 (70½ for those born prior to None for account owner
withdrawals July 1, 1949).
Deadline to 2021: April 15, 2022 2021: April 15, 2022
contribute 2022: April 15, 2023 2022: April 15, 2023
1Must be age 50 or older by December 31 of the contribution year. IRS Publication 590.
2Assumes participation in an employer’s retirement plan. No income limits apply when investors and spouses are not covered by a retirement plan at work.
Income limits based on Modified AGI (Adjusted Gross Income less certain deductions). Use Worksheet 1-1 in IRS Publication 590-A or consult your tax
professional.
3Distributions from a conversion amount must satisfy a five-year investment period to avoid the 10% penalty. This pertains only to the conversion amount that

was treated as income for tax purposes. The presenter of this slide is not a tax or legal professional. Clients should consult a personal tax or legal professional
prior to making any tax- or legal-related investment decisions. IRS Publication 590.
Source: IRS.gov; IRS Notice 2021-61.
 Retirement plan contribution and deferral limits: 2021/2022 GTR 50

Type of Retirement Account Specifics 2021 2022

401(k) elective deferral limit/with catch-up
$19,500/$26,000 $20,500/$27,000
contribution (age 50 and over)
Annual defined contribution limit $58,000 $61,000
401(k), 403(b), 457(b) Annual compensation limit $290,000 $305,000
Highly compensated employee threshold $130,000 $135,000
403(b)/457 elective deferrals/with catch-up
$19,500/$26,000 $20,500/$27,000
contribution (age 50 and over)
SIMPLE employee deferrals/with catch-up
SIMPLE IRA $13,500/$16,500 $14,000/$17,000
deferral (age 50 and over)1
Maximum contribution2 $58,000 $61,000
SEP IRA SEP minimum compensation $650 $650
SEP annual compensation limit $290,000 $305,000
Maximum contribution amount/with catch-up Single: $3,600/$4,600 Single: $3,650/$4,650
contribution (age 55 and over) Family: $7,200/$8,200 Family: $7,300/$8,300
Health Savings Account Single: $1,400 Single: $1,400
Minimum deductible
(HSA) Family: $2,800 Family: $2,800
Single: $7,000 Single: $7,050
Maximum out-of-pocket expenses
Family: $14,000 Family: $14,100
Wage base $142,800 $147,000
$18,960/year (before FRA*) $19,560/year (before FRA*)
Maximum earnings test exempt amounts3
Reference

Social Security $50,520/year (in year of FRA*) $51,960/year (in year of FRA*)

Maximum Social Security benefit at FRA* $3,113/month $3,240/month

Defined benefit – Maximum annual benefit at retirement $230,000 $245,000

*FRA is Full Retirement Age for Social Security.

1Employer may either match employee’s salary reduction contributions dollar for dollar up to 3% of employee’s compensation or make non-elective

contributions equal to 2% of compensation up to the annual compensation limit. IRS Publication 560.
2Employer contributions may not exceed the annual defined contribution limit or 25% of compensation. Other rules apply for self-employed individuals. IRS

Publication 560.
3In calendar years before FRA, benefit reduced $1 for every $2 of earned income above the limit; during year of FRA, benefit reduced $1 for every $3 of earned

income in months prior to FRA.

Source: IRS.gov; IRS Notice 2021-61; Internal Revenue Procedure 2021-25; SSA.gov; Social Security Administration Fact Sheet: 2022 Social Security changes.
 A closer look at tax rates: 2022 GTR 51

Federal income tax rates applicable to taxable income

Capital gains Medicare tax on earned Medicare tax on Limits to itemized
Tax rate Single filers Married filing jointly
& dividends income investment income deductions
0%
10% Up to $10,275 Up to $20,550
up to $41,675
-Medical expenses greater
than 7.5% of AGI deductible
(single) / $83,350
12% $10,275-$41,775 $20,550-$83,550
(married) -SALT (state and local taxes)
1.45% (employee portion,
22% $41,775-$89,075 $83,550-$178,150 0% deduction capped at $10,000
employers also pay 1.45%)
15%
-Mortgage interest deduction
24% $89,075-$170,050 $178,150-$340,100 up to $459,750
limited to primary/secondary
(single) / $517,200
32% $170,050-$215,950 $340,100-$431,900 homes with up to $750,000
(married)
new debt. Deduction is
3.80% (additional tax allowed on new home equity
35% $215,950-$539,900 $431,900-$647,850 2.35% (includes 1.45% employee debt that is used to repair,
will be levied on lesser
tax referenced above plus build or improve upon home
of i) net investment
additional 0.90% tax for earned
20% income or ii) excess -Cash charitable gifts
income above MAGI* deductible up to 100% of AGI
37% $539,900 or more $647,850 or more
$200,000/$250,000 threshold)
MAGI above
$200,000/$250,000
threshold)
The personal exemption has been repealed and individual tax rates and personal deductions sunset after 2025 as per the TCJA 2017.
Standard deduction: Single $12,950; Married filing jointly $25,900.
*Modified Adjusted Gross Income (MAGI) is AGI plus amount excluded from income as foreign earned income, tax-exempt interest and Social Security benefit.

Top/tax rates for ordinary income, capital gains and dividend income
Type of gain Maximum rate Alternative Minimum Tax (AMT) exemption**

Top rate for ordinary income & non-qualified dividends 37%/40.8%* Filing status Exemption Exemption phase-out range

Short-term capital gains (assets held 12 months or less) 37%/40.8%* Single/Head of Household $75,900 $539,900-$843,500
Reference

Long-term capital gains (assets held more than 12 months) & qualified dividends 20%/23.8%* Married filing jointly $118,100 $1,079,800-1,552,200

*Includes top tax rate plus 3.8% Medicare tax on the lessor of net investment income or excess of MAGI over threshold (single threshold $200,000; married filing jointly $250,000).
**The exemption amount is reduced .25 for every $1 of AMTI (income) above the threshold amount for the taxpayer’s filing status. For AMTI above the top range the exemption will be $0.

Federal estate, generation-skipping transfer (GST) tax & gift tax exemption
Top federal estate tax rate 40%

Federal estate, GST & gift tax exemption $12.06 million per individual/$24.12 million per couple*
*
Annual gift tax exclusion $16,000 per donor, per donee ($32,000 per couple)

*Increased levels expire after 2025.

Source: IRS.gov. The presenter of this slide is not a tax or legal professional. This slide is for informational purposes only and should not be
relied on as tax or legal advice. Clients should consult their tax or legal professional before making any tax- or legal-related investment
decisions.
Disclosures GTR 52
Unless otherwise indicated, all illustrations are shown in U.S. dollars. Model Portfolio Details (Equity%/Bond%) Source: PI-AA-MODELS_4Q20 0903c02a81cfc27a
Past performance is no guarantee of comparable future results. Asset class 20/80 40/60 50/50 60/40 80/20
Diversification does not guarantee investment returns and does not eliminate the
U.S. large cap growth 4.8% 9.6% 12.0% 14.4% 19.3%
risk of loss.
Indices are unmanaged and an individual cannot invest directly in an index. Index U.S. large cap value 4.8% 9.6% 12.0% 14.4% 19.3%
returns do not include fees or expenses.
U.S. mid/small cap 2.5% 4.8% 6.0% 7.3% 9.5%
The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities
market. This world-renowned index includes a representative sample of 500 U.S. REITs 1.0% 2.0% 2.5% 3.0% 4.0%
leading companies in leading industries of the U.S. economy. Although the S&P Developed market equities 5.0% 10.0% 12.5% 15.0% 20.0%
500 Index focuses on the large cap segment of the market, with approximately 75%
coverage of U.S. equities, it is also an ideal proxy for the total market. An investor Emerging market equities 2.0% 4.0% 5.0% 6.0% 8.0%
cannot invest directly in an index.
U.S. investment-grade bonds 62.8% 46.8% 38.5% 30.3% 12.5%
The Bloomberg Capital U.S. Aggregate Index represents securities that are SEC-
registered, taxable and dollar denominated. The index covers the U.S. investment- U.S. high yield bonds 10.5% 8.0% 7.0% 6.0% 4.5%
grade fixed rate bond market, with index components for government and
corporate securities, mortgage pass-through securities and asset-backed Emerging market debt 6.8% 5.3% 4.5% 3.8% 3.0%
securities. These major sectors are subdivided into more specific indices that are Model portfolios can only be distributed by Intermediaries where Advisory Portfolios are
calculated and reported on a regular basis. available.
This document is a general communication being provided for informational purposes
Bonds are subject to interest rate risks. Bond prices generally fall when interest
only. It is educational in nature and not designed to be a recommendation for any
rates rise.
specific investment product, strategy, plan feature or other purposes. By receiving this
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