J.P. Morgan Asset Management released its annual Guide to Retirement with a conference call presentation on Tuesday. The guide examines the most significant issues impacting the retirement landscape in 2020 and beyond, according to the company, and includes “current challenges and opportunities and the tools needed to support planning conversations.”
“As the economic and legislative environment continues to evolve, those nearing retirement and their advisors now more than ever need to have a firm understanding of the various decisions that must be made in order to comfortably reach the retirement finish line,” Katherine Roy, Chief Retirement Strategist at J.P. Morgan Asset Management, said in a statement. “The Guide aims to provide an objective framework to enable informed planning conversations by analyzing the most pressing issues impacting retirement.”
“Those making retirement planning decisions need to take into account an increasingly complex array of factors, ranging from the implications of the SECURE Act to managing health care costs and Medicare surcharges,” Sharon Carson, Retirement Strategist at J.P. Morgan Asset Management, added. “By assessing a range of scenarios across factors such as age, income and life-stage, the Guide lays the groundwork for effective retirement decision-making.”
Three key retirement themes are covered in the 2020 Guide to Retirement. They are:
Understanding the implications of the SECURE Act
The elimination of the stretch IRA, increases in the required minimum distribution (RMD) starting age, small business tax credits and pooled employer plans are all included in the Secure Act’s provisions.
“The SECURE Act included several provisions intended to increase access to an employer-provided retirement plan and savings rates as well as access to lifetime retirement income (i.e., protected income),” the guide states. “Certain changes such as the elimination of the stretch IRA and the increase in the required minimum distribution starting age should be carefully considered and may require you to update your retirement and estate plans.”
Managing health care costs pre- and post-retirement
Variations in bronze/silver plan costs across age and geography, rising annual healthcare costs in retirement and annual Medicare surcharges across income bands are addressed this year.
“Enrollees in Bronze plans may be healthier than those in Silver plans. For any specific individual, out-of-pocket expenses will likely be higher in a Bronze plan. Regardless of which plan type you choose, deductibles and copayments will vary from plan to plan. Premium tax credits and cost-sharing subsidies may be available to some individuals with Modified Adjusted Gross Income below $49,960 for an individual or $67,640 for a couple in most states.”
Long-term care planning solutions
We’re all living longer, and there is a high likelihood of therefore needing long-term care, according to JPMAM.
“This often starts at home before progressing to other settings,” the guide concludes. “While considering the range of possibilities, take into account that 1 in 10 men and nearly 2 in 10 women are projected to have a significant care need for more than 5 years.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
