How to build a better retirement—even in volatile markets

Volatile markets can be particularly unsettling for those who are closest to retirement.

Now is a good time to reassess how volatility may affect different parts of your balance sheet

After eight years of markets seeming to do nothing but rise, “seeing the Dow down 600 to 800 points in a single day [as it has been recently] is a new feeling,” says Seth Dubrow, a J.P. Morgan wealth strategist based in New York. “People planning to retire in the near term are concerned that their investments may not sustain them after their working years are over.”

Dubrow’s advice: Seize the opportunity. Refresh and refocus, as needed. After the long bull market, says Dubrow, portfolios that might have been well-balanced previously may now be overweight in stocks and may require reallocation toward lower-risk investments. This is especially the case if retirement is slated to begin in the next few years.

Refocusing is good not only for those close to retirement, says Philipp Hecker, Head of Wealth Planning and Advice for J.P. Morgan; it’s also good for everyone who wants to retire eventually. “Typically the beginning of a year is a great catalyst for investors to re-establish their goals for their lives at large,” he says. “They tend to go to the gym and pursue fitness goals. Why not commit to something that arguably will have just as important a long-term impact?”

So where to start? J.P. Morgan has a 10-point guide that breaks down into three parts: Picture your future, rally your resources, and optimize for success.

Picture your future

Our experts say this first part is particularly crucial. Take the time to really imagine your retirement, and ask the big questions. How much will you really need to retire? What sort of lifestyle do you want to maintain—and how do you expect it to change as you age? How much might you want to leave to children? Do you want to create a charitable legacy, perhaps by giving to a school or another particular cause? And, while doing this, don’t be overly optimistic; build in a margin of safety.

Many people think that in retirement they will spend less than they do while working, but this premise is often incorrect, says Dubrow. So be honest with yourself.

Also, Dubrow points out that wealthy people, who have the funds to retire earlier than others and before Medicare kicks in, need to be especially cognizant of expenses such as healthcare, which can run $40,000 annually just for insurance premiums for a family of four. Even after Medicare is available, healthcare for a couple costs more than most think.

It is also important that you plan for a long retirement, Hecker points out, noting that statistics indicate better-educated individuals with higher incomes and healthier lifestyle choices tend to live longer. There is a 50% chance that one member of a couple over 65 will live to 90, and a 20% chance one will make it to 95.  “Many of us underestimate the lives we will enjoy,” he says.

If life expectancy continues to increase—and everything we know about science suggests that it will—you’ll need to plan and invest for a life even longer than the one predicted by today’s actuarial tables. You may be looking at 30+ years in retirement. Staying financially comfortable will therefore require dedicating an appropriate portion of your portfolio to growth, to increase the likelihood your investments will maintain purchasing power.

In addition, don’t forget to include others in your plans; speak with your spouse. “It’s important for couples to each articulate their priorities for retirement so they can get to a shared vision,” says Hecker.  

Rally your resources

Once your dreams and team are in order, the next part is to execute, which can be fiendishly difficult to do. The rules are simple: Save and invest consistently from the start. Diversify investments to minimize risk. Also, be sure to maximize Social Security benefits, both yours and your spouse’s.

Most wealthy people can afford to wait to begin receiving Social Security payments. If you do wait until after you hit your “full retirement age” (around 66 years old), your benefits will permanently increase by 8% every year, until you hit age 70.

Being able to wait to take Social Security doesn’t mean people always want to, or even should. One of our clients chose the permanent haircut of starting Social Security at 62, the earliest possible age, because she wanted to use the money to help her daughter, a new mother, pay for a nanny.

Other aspects of retirement planning are less obvious, but just as important. Take the use of credit, for example. As it can be much harder to borrow when in retirement, we recommend that clients consider arranging for a line of credit while they are still working. That way, they can use credit strategically—as an alternative source of short-term funding for a home remodel, for example, or unexpected healthcare expenses when selling investments would be less advantageous, such as during a recession.

We also recommend bridging the occasional income gaps with loans instead of asset sales that may create unnecessary capital gains tax liabilities. (Speak to your tax advisor about how to structure your loans to maximize interest deductibility.)

Optimize for success

Now is a good time to reassess how volatility may affect different parts of your balance sheet, says Thomas Jarecki, a J.P. Morgan wealth strategist based in Chicago. One way to think about it, says Jarecki, is to put your wealth into buckets that each serve specific purposes.

  1. Liquidity—Determine how much money you need as a safety net. These are held in low risk accounts such as bank deposit accounts, CDs and money markets. 
  2. Lifestyle—Assess how much you’ll need to set aside now to fund your lifestyle expenses now, and later in retirement. Consider allocating these assets in conservatively diversified portfolios.
  3. Growth and wealth preservation—Any remaining assets may be invested more aggressively and go toward funding longer-term goals such as transferring wealth to family and charitable organizations important to you.

In other words, says Dubrow, exercise control where you can. When it comes to retirement, information and good planning help create peace of mind.

Speak with your J.P. Morgan advisor about how you can build a better retirement. 


Purpose of This Material

This material is for information purposes only. The information provided may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). The views and strategies described in the material may not be suitable for all investors and are subject to risks. This material is confidential and intended for your personal use. It should not be circulated to or used by any other person, or duplicated for non-personal use, without our permission. Please read this Important Information in its entirety.


We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation; however, we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. We do not make any representation or warranty with regard to any computations, graphs, tables, diagrams or commentary in this material which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in it constitute our judgment based on current market conditions and are subject to change without notice. We assume no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, view expressed for other purposes or in other contexts, and this materials should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward looking statements should not be considered as guarantees or predictions of future events. Investors may get back less than they invested, and past performance is not a reliable indicator of future results.

Risks, Considerations and Additional Information

There may be different or additional factors which are not reflected in this material, but which may impact on a client’s portfolio or investment decision. The information contained in this material is intended as general market commentary and should not be relied upon in isolation for the purpose of making an investment decision. Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document is intended to constitute a representation that any investment strategy or product is suitable for you. You should consider carefully whether any products and strategies discussed are suitable for your needs, and to obtain additional information prior to making an investment decision. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by JPM and/or its officers or employees, irrespective of whether or not such communication was given at your request. JPM and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions. Contact your J.P. Morgan representative for additional information concerning your personal investment goals. You should be aware of the general and specific risks relevant to the matters discussed in the material. You will independently, without any reliance on JPM, make your own judgment and decision with respect to any investment referenced in this material.

J.P. Morgan may hold a position for itself or our other clients which may not be consistent with the information, opinions, estimates, investment strategies or views expressed in this document. JPM or its affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer.

© 2019 JPMorgan Chase & Co. All rights reserved


Check the background of Our Firm and Investment Professionals on FINRA's BrokerCheck


This website is for informational purposes only, and not an offer, recommendation or solicitation of any product, strategy service or transaction. Any views, strategies or products discussed on this site may not be appropriate or suitable for all individuals and are subject to risks. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor's own situation. 

This website provides information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC (“JPMS”). When JPMS acts as a broker-dealer, a client's relationship with us and our duties to the client will be different in some important ways than a client's relationship with us and our duties to the client when we are acting as an investment advisor. A client should carefully read the agreements and disclosures received (including our Form ADV disclosure brochure, if and when applicable) in connection with our provision of services for important information about the capacity in which we will be acting.

Equal Housing Opportunity logo

J.P. Morgan Chase Bank N.A., Member FDIC Not a commitment to lend. All extensions of credit are subject to credit approval 

“J.P. Morgan Securities” is a brand name for a wealth management business conducted by JPMorgan Chase & Co. (“JPMC”) and its subsidiaries worldwide. JPMorgan Chase Bank, N.A. and its affiliates (collectively “JPMCB”) offer investment products, which may include bank managed accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC (“JPMS”), a member of FINRA and SIPC. Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Please read additional Important Information in conjunction with these pages.