On screen:

This video opens with two speakers sitting behind desks with notes and coffee mugs.

Logo:

A J.P. Morgan Wealth Management logo appears in an upper corner...

Side note:

...as a bold disclaimer in a text box reads:

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INVESTMENT AND INSURANCE PRODUCTS:

NOT A DEPOSIT
NOT FDIC INSURED
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
NO BANK GUARANTEE
MAY LOSE VALUE

On screen:

Identifying text appears beneath the speaker on the left, a woman in a brown blazer:

On screen:

Elyse Ausenbaugh

HEAD OF INVESTMENT STRATEGY

J.P. MORGAN WEALTH MANAGEMENT

On screen:

On the right, identifying text appears beneath a man in a gray blazer:

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Ajene Oden

GLOBAL INVESTMENT STRATEGIST

J.P. MORGAN WEALTH MANAGEMENT

Elyse Ausenbaugh:

I'm Elyse Ausenbaugh, and I'm joined by fellow Global Investment Strategist AJ Oden. We're here to talk through the aspects of planning for retirement that people tend to find most complex.

Ajene Oden:

We asked our audience their thoughts, and understanding tax implication[s] rose to the top.

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The question appears beside him:

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What part of retirement planning do you find most challenging?

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A horizontal bar graph with four numbered items shows 22% answered 'Being consistent with my plan,' 21% answered 'Knowing how much to contribute,' 13% answered 'Mapping out my goals,' and 43% answered 'Understanding tax implications.'

Side note:

Small text below reads:

On screen:

J.P. Morgan Wealth Management LinkedIn poll, July 2024. Survey responses: 866.

Ajene Oden:

When it comes to retirement planning and taxes, there's a lot to consider, and it depends on what phase of the journey you're in.

Elyse Ausenbaugh:

Right, because some folks might still be in the saving phase, where you're adding money to accounts that are earmarked for retirement.

On screen:

Under the heading, 'Contributions,' an arrow points from a cash icon into a piggy bank icon. Then, three piggy banks appear under the heading: 'Investment Growth.'

Elyse Ausenbaugh:

Next comes the growth phase, where that money is already invested and it's starting to grow for that final phase, which is when you're actually taking withdrawals from retirement accounts.

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Arrows point upward from the piggy banks to cash icons, under the heading 'Withdrawals.' Then, text reads:

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Tax implications for retirement savings by account type

Ajene Oden:

I found this graphic helpful in breaking it down. The tax treatment in a given phase is going to depend on the type of account we're talking about.

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Four account types appear, a blue plus sign represents 'Preferential tax treatment,' and a red minus sign represents 'Subject to taxes.' The first heading indicates 'Contributions.' First, 'Pre-tax 401(k)/Traditional IRA' shows a plus sign: 'Preferential tax treatment.' Second, 'Roth 401(k)/Roth IRA shows a minus sign: 'Subject to taxes.' Third, 'After tax 401(k)/non-deductible Traditional IRA shows a minus sign: 'Subject to taxes.' And last, 'Health Savings Account (HSA)' shows a plus sign: 'Preferential tax treatment.'

Under the heading 'Investment growth,' all four account types show plus signs: 'Preferential to tax treatment.' And under the heading 'Withdrawals,' 'Pre-tax 401(k)/Traditional IRA' shows a minus sign: 'Subject to taxes (Taxed as ordinary income).' Next, 'Roth 401(k)/Roth IRA' shows a plus sign: 'Preferential tax treatment (For qualified withdrawals).' Then, 'After-tax 401(k)/non-deductible Traditional IRA' shows a minus sign: 'Subject to taxes (Investment returns taxed as ordinary income).' And last, 'Health Savings Account (HSA) shows a plus sign: 'Preferential tax treatment (for qualified health care expenses).'

Side note:

A disclosure reads:

On screen:

Federal taxes; states may differ. This is not intended to be individual tax advice. Consult your tax professional.'

Note one: 'Income and other restrictions may apply to contributions. Tax penalties usually apply for early withdrawals. Qualified withdrawals are generally those taken over age 59 1/2; qualification requirements for amounts converted to a Roth from a traditional account may differ; for some account types, such as Roth accounts, contributions that are withdrawn may be qualified. See IRS Publication 590 and 560 for more information.' Note two: 'Withdrawals from after-tax 401(k) and non-deductible IRAs must be taken on a pro-rata basis including contributions and earnings growth. For non-deductible IRAs, all Traditional IRAs must be aggregated when calculating the amount of pro-rata contributions and earnings growth.' Note three: 'There are eligibility requirements. Qualified medical expenses include items such as prescriptions, teeth cleaning and eyeglasses and contacts for a medical reason. Cosmetic procedures, such as teeth whitening, and general health improvement, such as gym memberships and vitamins, are not qualified expenses. A 20% tax penalty applies on non-qualified distributions prior to age 65. After age 65, taxes must be paid on non-qualified distributions. See IRS Publication 502 for details. Source: J.P. Morgan Asset Management.

Elyse Ausenbaugh:

The good news is accounts like IRAs or 401(k)s, whether they're Roth or regular, usually allow investors to compound the growth of their investments tax-free.

On screen:

In an animated graphic, cash flows from the word 'Tax-deferred,' through a tan 'Traditional IRA' file, to the word 'Taxed.' More cash flows from the word 'Taxed,' through a purple 'Roth IRA' file, to the word 'Tax free.'

Elyse Ausenbaugh:

For regular and Roth retirement accounts, money may go in or come out tax-free, depending on the type of account and your qualification.

On screen:

Now, a file labeled 'HSAs (Health Savings Accounts)' appears beside a plus sign and the words: 'Qualified health plan.'

Elyse Ausenbaugh:

For the HSAs, which have to be paired with a qualified health plan, you can get triple tax benefits.

On screen:

One file with text becomes three: 3 HSAs plus 3 qualified health plans equal three tax benefits. Then text appears:

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Qualified health care expenses

TAX FREE

Elyse Ausenbaugh:

If the funds are used on qualified health care expenses, they may be entirely tax-free on contributions, investment growth, and withdrawals.

On screen:

Three icons represent the categories: A cash symbol and arrow for 'Contributions,' an upward-trending bar graph for 'Investment growth,' and a hand-holding-cash symbol for 'Withdrawals.' Then, cash flows into a house icon under the heading: 'Contribution phase.'

Ajene Oden:

When you are in the contribution phase, your current household income can impact your eligibility to get a deduction on something like a contribution to a Traditional IRA or directly to contribute to a Roth IRA.

On screen:

Cash flows from the home into the 'Traditional IRA' file, then into the 'Roth IRA' file. Under the heading, 'Withdrawal Phase,' numbers with an upward-pointing arrow tick up to 73 beside a person icon. Text reads: 'age where the government actually requires them to start taking minimum distributions.'

Side note:

A disclosure in bold reads:

On screen:

(In bold) JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.

Ajene Oden:

In the withdrawal phase, some folks may opt to wait until they reach the age where the government actually requires them to start taking minimum distributions, to hold onto the tax advantage compounding for as long as possible.

On screen:

Money flows from the 'Traditional IRA' and 'Roth IRA' files to the person icon.

Ajene Oden:

Every situation and strategy is going to vary.

Elyse Ausenbaugh:

Well, at least financial advisors can help you create a plan, and doing that in partnership with a tax professional can help maximize its effectiveness.

On screen:

Text appears over white:

On screen:

THE ANSWER IS J.P. MORGAN WEALTH MANAGEMENT

Elyse Ausenbaugh:

To learn more about retirement strategies, tax planning, and more, please visit chase.com/theknow

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Text reads:

On screen:

To learn more, visit chase.com/theknow

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An oval around the URL turns from black to brown.

Side note:

Disclosures:

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All market and economic data are sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.

The views, opinions, estimates and strategies expressed herein constitutes the speaker's judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan. This information in no way constitutes J.P. Morgan Research and should not be treated as such. You should carefully consider your needs and objectives before making any decisions --including whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with any investment or financial service, product or strategy prior to making an investment decision. For additional guidance on how this information should be applied to your situation, you should consult your advisor.

Investing in securities involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.

(In bold) Outlooks and past performance is not a guarantee of future results.

(Also in bold) 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 transaction.

It is not possible to invest directly in an index.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through (in bold) J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

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Disclosures