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JP Morgan Retirement Study
Old 03-10-2023, 06:01 PM   #1
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JP Morgan Retirement Study

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
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Old 03-10-2023, 10:32 PM   #2
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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!
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Old 03-11-2023, 04:20 AM   #3
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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.
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Old 03-11-2023, 06:01 AM   #4
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A good study. Interesting.
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Old 03-11-2023, 06:11 AM   #5
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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.
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Old 03-11-2023, 06:32 AM   #6
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Thank you for sharing this. Very interesting.
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Old 03-11-2023, 06:46 AM   #7
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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.
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Old 03-11-2023, 06:53 AM   #8
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Also eye opening!
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Old 03-11-2023, 07:17 AM   #9
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Terrific. Thank you. I passed this along to some family members.

Slide 34 made me grateful that weíre using Vanguardís own dynamic spending model.
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Old 03-11-2023, 07:25 AM   #10
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…option strategies to mitigate SORR…
First time I have seen that.
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Old 03-11-2023, 07:28 AM   #11
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Quote:
Originally Posted by ImThinkin2019 View Post
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 donít believe you can contribute to an HSA once you begin Medicare.
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Old 03-11-2023, 07:56 AM   #12
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Terrific. Thank you. I passed this along to some family members.

Slide 34 made me grateful that weíre using Vanguardís own dynamic spending model.
Similar to Firecalc. but doesn't allow for portfolio deviations. The VG calculator takes all of 2022 into account.
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Old 03-11-2023, 08:12 AM   #13
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…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.
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Old 03-11-2023, 08:13 AM   #14
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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...
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Old 03-11-2023, 08:17 AM   #15
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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.
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Old 03-11-2023, 08:24 AM   #16
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Exceptionally well done. I learned a lot, particulary on the puts-and-takes of the government programs.

Thanks for sharing!
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Old 03-11-2023, 08:33 AM   #17
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Originally Posted by ImThinkin2019 View Post
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.
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I donít believe you can contribute to an HSA once you begin Medicare.
Right.

And I canít 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 wouldnít reduce the RMD.
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Old 03-11-2023, 08:40 AM   #18
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Right.

And I canít 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 wouldnít 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.
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Old 03-11-2023, 08:42 AM   #19
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Right.

And I canít 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 wouldnít reduce the RMD.
You canít contribute to an HSA after 65 and RMDs donít start until later so thatís a head scratcher for me too.
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Old 03-11-2023, 09:41 AM   #20
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Another cool graphic/decision tree.
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