JP Morgan Retirement Study

[yakers]

Saw this on the Boglehead site and have been reading it, pretty wide ranging engagement with retirement planning and outcomes.

https://am.jpmorgan.com/content/dam/...irement-us.pdf

It even had a page on why people reported that they had reitred early with 32% for medical reasons and 38% because they could afford it. Also liked the dollar cost raviging term for periodic retirement withdrawals

[2017ish]

Very interesting.

Some points that stood out--the percentage of gross income needed in retirement was very high for high income retirees. (Page 18) 72% for those making 300K? That would seem to assume that you spend a LOT when working...

The discussion of the 4% "rule" assumes a 40/60 portfolio, rather than a 60/40, which I don't think I'd seen before.

Thanks for passing this along!

[ImThinkin2019]

Thank you for posting this. It made a lot of good points that I mostly agree on.

As a recent retiree who purchased healthcare a little before age 65, then started Medicare, I found their cost estimates very close to my experience.

I am interested in the idea of using HSA to avoid or reduce RMD's. Anyone have experience on this? Can I set up an HSA at a brokerage house? Right now ours are at a bank.

[DrRoy]

A good study. Interesting.

[target2019]

It's a well-done slide deck.

I usually start with A/A when talking to the kids, such as on page 52. Vanguard used to have an interactive version of this, where you could move a slider and increase or decrease the ratio, and see average returns over the time period.

[DektolMan]

Thank you for sharing this. Very interesting.

[Midpack]

Great stuff, thanks. I just looked at the first 15 pages or so, but I plan to read through it all. Thought this was a good illustration, spending declines as we age BUT may increase substantially approaching EOL - plan accordingly.

[Midpack]

Also eye opening!

[Markola]

Terrific. Thank you. I passed this along to some family members.

Slide 34 made me grateful that we’re using Vanguard’s own dynamic spending model.

[COcheesehead]

…option strategies to mitigate SORR…
First time I have seen that.

[Dash man]

Quote:

Originally Posted by ImThinkin2019 Thank you for posting this. It made a lot of good points that I mostly agree on. As a recent retiree who purchased healthcare a little before age 65, then started Medicare, I found their cost estimates very close to my experience. I am interested in the idea of using HSA to avoid or reduce RMD's. Anyone have experience on this? Can I set up an HSA at a brokerage house? Right now ours are at a bank.

I don’t believe you can contribute to an HSA once you begin Medicare.

[Rianne]

Quote:

Originally Posted by Markola Terrific. Thank you. I passed this along to some family members. Slide 34 made me grateful that we’re using Vanguard’s own dynamic spending model.

Similar to Firecalc. but doesn't allow for portfolio deviations. The VG calculator takes all of 2022 into account.

[MarieIG]

Quote:

Originally Posted by COcheesehead …option strategies to mitigate SORR… First time I have seen that.

We have some members that have been doing that.

Interestingly, JP Morgan has an income ETF wherein they use options to boost income. Both the income and share value vary, and IIRC it is high risk. I nibble at it once in a while, and I mean nibble, like a share at a time, in an IRA (because it would generate a high percentage of taxable income). I am not recommending it, I just find it worth watching - for now.

[TheWizard]

I guess I don't agree with slide 49 which shows retirees needing more emergency reserves than working people, since we retirees aren't going to lose our source of income in retirement.

But maybe that depends on how "FAT" a retiree's income is.
If a retiree just planned on enough income to cover "basic" expenses, then $1200 for a new set of tires for your pickup can seem like an emergency.

OTOH, I have excess retirement income almost every month now that I toss into my taxable investment account. I suppose that might look like a (continually growing) emergency fund to a forensic accountant, but I don't look at it that way...

[MarieIG]

I skimmed it briefly last night, but am pretty useless at night and couldn't see the foot notes. We're having company today, so I may not get around to reading it closely until Monday. I got a kick out of the SS map.

[Closet_Gamer]

Exceptionally well done. I learned a lot, particulary on the puts-and-takes of the government programs.

Thanks for sharing!

[audreyh1]

Quote:

Originally Posted by ImThinkin2019 As a recent retiree who purchased healthcare a little before age 65, then started Medicare, I found their cost estimates very close to my experience. I am interested in the idea of using HSA to avoid or reduce RMD's. Anyone have experience on this? Can I set up an HSA at a brokerage house? Right now ours are at a bank.

Quote:

Originally Posted by Dash man I don’t believe you can contribute to an HSA once you begin Medicare.

Right.

And I can’t imagine how an HSA would avoid or reduce RMDs anyway. Maybe someone can enlighten me. It might reduce how much you need to withdraw from an IRA to meet living expenses, but that wouldn’t reduce the RMD.

[MarieIG]

Quote:

Originally Posted by audreyh1 Right. And I can’t imagine how an HSA would avoid or reduce RMDs anyway. Maybe someone can enlighten me. It might reduce how much you need to withdraw from an IRA to meet living expenses, but that wouldn’t reduce the RMD.

Maybe some people choose to use an HSA (to a certain extent) in lieu of an IRA? I don't see how it would reduce RMDs either.

[COcheesehead]

Quote:

Originally Posted by audreyh1 Right. And I can’t imagine how an HSA would avoid or reduce RMDs anyway. Maybe someone can enlighten me. It might reduce how much you need to withdraw from an IRA to meet living expenses, but that wouldn’t reduce the RMD.

You can’t contribute to an HSA after 65 and RMDs don’t start until later so that’s a head scratcher for me too.

[Midpack]

Another cool graphic/decision tree.