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  1. J.P. Morgan
April 5, 2022updated Apr 27, 2023

Key Actions to Set Yourself up for Financial Success

From our partners: Whatever happens, be prepared on the financial front.

By Elite Traveler

We’re coming off another banner year for the stock markets, and it looks like more market strength lies ahead. But inflation is rising. Covid-19 infection rates are spiking. Interest rate hikes are on the horizon. Plus political storms are expected, given the battle lines drawn in Congress and the coming mid-year elections.

Whatever happens, be prepared on the financial front. Set yourself up to take advantage of the potential opportunities available to you, and protect yourself against potential risks.

Here are 10 actions you may wish to consider for your investing, planning and financial lifestyle:

Review your portfolio

Equity markets continued to soar in 2021 and interest rates have risen. Our outlook is positive. Still, it’s important to review the risk you’re taking in each pool of capital on your balance sheet and reaffirm its purpose: Do you want it to meet your lifestyle needs? Earmarked for the next generation? Aligned to a large near-term purchase? Such considerations will inform the tweaks you may need to make to your portfolio.

Check your “liquidity bucket”

In major economies across the world, household savings are historically elevated, and many high-net-worth individuals are holding more cash than they probably need. Yes, it is wise to have cash on hand for near-term expenses and as a psychological safety net to weather volatility. But “strategic cash”—cash as an investment—is our least favorite asset class because interest rates are low and inflation is rising.

How much cash should you have, then, in your “liquidity bucket?” We generally suggest holding enough for one to two years’ worth of living expenses plus any near-term large expenditures. Of course, add more if you need it to feel secure. Any amount over this number can be invested for your longer-term goals.

Consider “megatrends”

We’ve identified some significant multi-year, overarching trends that investors may find especially attractive: digital transformation, healthcare innovation and sustainability.

We believe megatrend investments are generally best suited for longer-term goals.

Take advantage of low rates while you can

Some central banks have already started raising rates, and we expect US policy rates will begin to rise this year.

Consider refinancing and restructuring your debt while interest rates are still low. Also explore whether your family might benefit from any of the estate planning strategies that are potentially more lucrative when interest rates are low, such as grantor-retained annuity trusts (GRATs), charitable lead trusts (CLATs) and intra-family loans.

Do your annual “to do’s” ASAP

There is some planning we all should do every year, and this year is no exception. Moreover, it may be more tax-efficient to take care of these items as early in the year as possible.

No matter how young or old we may be, we should fund our retirement accounts, including 401(k)s, 403(b)s and IRAs.1

Once we’ve put that oxygen mask on ourselves, we can turn to help others: Decide if you want to make annual exclusion gifts. The annual exclusion is the amount that most US taxpayers are allowed to give every year, free of any gift taxes, to as many individuals and for whatever use. In 2022, it’s $16,000, which means married couples can give up to $32,000.

Set up the year’s charitable giving

Look at the donations you made last year to help you organize your giving this year, and take a moment, with a family member or on your own, to learn more about causes you may want to support and the ways you might make a real difference.

Whatever amount you choose to give, taking a proactive approach can help your charitable dollars have a greater impact. So prioritize your charitable goals for the year. Assess how the timing of your donation might affect your tax situation. And identify which gifting vehicle(s) might best support your strategy.

Consider using your full lifetime transfer tax exemption

The lifetime exemption, or amount that any individual can give to anyone other than a US citizen spouse without paying gift tax, is at record highs at $12.06m per person ($24.12m for a married couple).2 Under current law, it is scheduled to be reduced by 50% starting in 2026.

If you have both the capacity and the desire to give to your loved ones during life, now may be an excellent time to do so.

Make sure you and your family are cyber safe

As more of our life is handled online, the dangers of cyber theft and fraud grow. But there’s a lot you can do to protect your financial life and personal data.

Start the year by changing all your passwords, being sure to set a calendar reminder to change these passwords at least two more times in the coming year. Also: Remove all the apps from your devices that you do not use, add anti-virus and ad-blocking software on all your devices, and remember to use multi-factor authentication whenever you can.

Explore ways to increase tax efficiency

Now is a good time to do a quick overview to make sure you are making the most of your financial resources with tax-savvy planning strategies.

For example, if you’re spending from your portfolio, are you sure you are pulling from the most efficient place? Is your mortgage structured so that you might deduct all of the interest? If you have a concentrated position, are you aware of the various opportunities (depending on whether you’ve earmarked the asset to support your lifestyle, your family or your philanthropic interests)? If you plan to sell a business in coming years, have you started your pre-transaction planning?

Plan a family meeting

Two key reasons wealth diminishes across generations are (i) a lack of communication and trust, and (ii) beneficiaries’ unpreparedness. Both can be avoided simply by holding a thoughtfully structured gathering of all your financially connected family members at least once a year. This forum is your opportunity to educate the rising generation on the purpose of family resources or any of the topics listed in this article, and to discover what they would like to learn more about.

J.P. Morgan Private Bank in Orange County can help

As you look to make the most of 2022, let’s discuss which of these and other moves might be right for you. Connect with us today.


1 The 2022 contribution limit to retirement accounts such 401(k)s and 403(b)s is $20,500 ($27,000 if you are age 50 or older); for IRAs, it’s $6,000 ($7,000 if you are age 50 or older). The employee contribution limit is $20,500 ($27,000 if you are age 50 or older); the aggregate employee and employer contribution limit is $61,000 ($67,500).

2 This represents a $360,000 increase from 2021 levels ($720,000 increase for a married couple).

Important information

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 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.

General risks and considerations

Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully 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 an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

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Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, “J.P. Morgan”) have an actual or perceived economic or other incentive in its management of our clients’ portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client’s account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client’s portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account.

Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio’s investment objective.

As a general matter, we prefer J.P. Morgan managed strategies. We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as cash and high-quality fixed income, subject to applicable law and any account-specific considerations.

While our internally managed strategies generally align well with our forward-looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios.

The Six Circles Funds are US-registered mutual funds managed by J.P. Morgan and sub-advised by third parties. Although considered internally managed strategies, JPMC does not retain a fee for fund management or other fund services.

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JPMorgan Chase Bank, N.A. and its affiliates (collectively “JPMCB”) offer investment products, which may include bank-managed investment 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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JP Morgan 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 the Legal Disclaimer in conjunction with these pages.


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