Tue. Jan 25th, 2022

The new research draws on actual saving and withdrawal patterns from some 4,500 DC plans with more than 1.4 million participants, sourced from MassMutual Financial Group. Retiree spending data comes from more than 5 million de-identified JPMorgan Chase Bank households.

Evolving Glide Path

Based on its understanding of the saving and spending patterns of plan participants, J.P. Morgan Asset Management said it plans to evolve the glide path across its SmartRetirement suite of target date funds, increasing equity allocations while maintaining broad diversification and de-risking in the critical years leading up to retirement. 

This will also enable more participants to reach a minimum level of adequate replacement income, Daniel Oldroyd, the firm’s head of target date strategies, said in the statement. 

“Additionally, with data telling us that more participants are staying in their plan after retiring, we have introduced a dynamic retirement income strategy into the glide path to help set an optimized annual spend down amount that changes each year, starting at the point of retirement,” Oldroyd said.

The firm said its recent research, which drew on data from the Employee Benefit Research Institute, showed that participants are heavily reliant on required minimum distributions for withdrawal guidance. 

J.P. Morgan Asset Management has developed an interactive experience to help participants decide how much to withdraw each year based on sample withdrawal amounts estimated as a percentage of participants’ account balances that may be safely withdrawn each year, while allowing redemption in future years.

By senior