Wealth Planning

Preserving your wealth

Wealth preservation or, at the very least, protection against wealth erosion, is critical to the success of a wealth management plan 


 

Managing factors within your control that impact your wealth, such as spending and saving, and preparing yourself for factors you cannot control, such as down markets and changes in financial policy, are essential when thinking about how to hold and invest your wealth. Whether your goal is to enjoy your wealth during your lifetime, create a lasting legacy for your family members, engage in philanthropy, or all of the above, there are multiple factors that can affect whether you will have sufficient assets to achieve your goals.

Know and monitor your spending

Monitoring spending is a critical factor in preserving wealth, in particular because your spending is within your control. Expenses generally fall into two categories: necessary spending (e.g., housing costs, food) and discretionary spending (e.g., restaurants, vacations, gifts, second residences). Monitoring spending is an easy way to identify discretionary spending that can be curtailed if necessary. This includes reducing spending not only in times of global or market uncertainty, but also when expenses arise that were unexpected but become necessary over time (e.g., caring for an aging parent, home improvement). Your spending habits and rate of savings can also impact your ability to retire. A low current spending rate coupled with a high current saving rate could provide for sufficient future income to allow you to retire earlier than anticipated. On the other hand, spending more now may require that you continue to work past your desired retirement age in order to amass sufficient savings to provide for retirement. Knowing your spending habits will enable you to adapt them as necessary from time to time; this can have a meaningful effect on whether your portfolio will be able to last for the long term and enable you to retire when you’d like.

Benefits of diversifying a portfolio

Diversifying your portfolio can help ensure that your wealth is positioned well to bear the brunt of forces beyond your control (e.g., market volatility and changes in tax policy). While it is almost impossible to eliminate the wealth-eroding effects of external forces, there are ways to temper them. Asset allocation is one of the most effective long-term investment techniques. Asset allocation is generally more significant than asset selection or even market timing when considering the likelihood of a portfolio’s success, since it balances an investor’s risk tolerance (i.e., willingness to take risk) against his or her financial situation and risk capacity (i.e., ability to take risk and potentially lose money). Though the returns of a fully diversified portfolio may not always be as high as they might otherwise be with a less-diversified portfolio, losses are usually lower, which can help to protect an investor’s wealth in times of financial decline.

A holistic view of your portfolio, with an eye to the long term, can help to set you on the path to live the life you want to live and leave the legacy you want to leave. 

IMPORTANT INFORMATION

This material is intended for educational and information purposes only. This material is intended to help you understand the financial consequences of the concepts and strategies discussed here in very general terms. The strategies discussed often involve complex tax and legal issues, which require discussion with a qualified tax and legal advisor. JPMorgan Chase & Co., 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.

Non-reliance

We believe the third party 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 is provided for illustration/reference purposes only. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of J.P. Morgan or views expressed for other purposes or in other contexts, and this material 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. All examples, case studies and scenarios are shown for illustrative purposes only, are not a guarantee of future results and should not be relied upon as advice or interpreted as a recommendation.

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 strategy. The information contained in this should not be relied upon in isolation for the purpose of making a 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 J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request.

“J.P. Morgan Securities” is a brand name for a wealth management business conducted by JPMorgan Chase & Co. and certain subsidiaries. J.P. Morgan Securities offers investment products and services through J.P. Morgan Securities LLC, member FINRA and SIPC. Bank products and services are offered by JPMorgan Chase Bank, N.A. and its bank affiliates.

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Wealth Planning

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“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.

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