Wealthy boomers who are avidly looking forward to popping open their finest Dom Prignon champagne bottles upon reaching retirement age might want to keep them stashed indefinitely in the wine cellar. They might, at any rate, after reading a new survey from The Phoenix Companies.
The report, titled 2004 Phoenix Wealth Survey, portrays high net worth individuals (most of them boomers) as more confident about their financial position and less gun-shy about investing than in recent years. Yet, theyre no more knowledgeable than before about financial matters and, in particular, retirement planning needs.
This is a scary combination, says Jack Sharry, a senior vice president of marketing and asset management distribution at the Phoenix Companies, Hartford, Conn. The conclusion we drew is that theyre underfunded, underaware and underadvised.
Harris Interactive, a Rochester, N.Y.-based market research and consulting firm, conducted this fifth annual online survey on behalf of Phoenix from January to February 2004. The poll sampled 2,804 of an estimated 6 million high net worth (HNW) individuals in the U.S.
Of the total, 55% were boomers. The average age of respondents was 58, the eldest of the 76 million boomers born between 1946 and 1964.
To qualify for the survey, respondents had to have $1 million in liquid assets (excluding the value of their home).
The reports authors found heightened optimism on several questions. For example, 30% said they were very optimistic about their financial future, as compared with 18% in 2003. And 38% percent noted their long-term wealth was extremely or very secure, up 4% from 2003.
Similarly, 41% said that, to make money, I need to take above-average risks, up from 37% in 2003. Half of respondents said they make decisions without consulting financial professionals, up 3% from the year prior. And 50% said they were very or fairly knowledgeable about stock market activity.
However, only 34% stated they have assured a comfortable standard of living during retirement. Seventy-seven percent expect they will retire with at least 80% ($162,000 on average) of their current annual income.
To guarantee the last figure for life, says Sharry, individuals would have to deposit on average $2.2 million in an immediate annuity. For the polled group, the average net worth totaled $2.6 million.