Retirement Planning For The High Net WorthIn Search of a New Model
One of the common myths regarding the high-net-worth market is that retirement security is not a major concern. The logic is that these households, having already achieved millionaire net worth status, have amassed enough of a nest egg to carry them through their golden years. As demonstrated by the results from the 2004 Phoenix Wealth Survey, nothing could be further from the truth.
An Increasing Concern
First, 69% of the high net worth indicate that their most important financial goal is to “assure a comfortable standard of living during retirement,” an increase of 6 percentage points from just one year ago. This result suggests that their concerns primarily revolve around protection of a lifestyle, and for the majority of the high net worth this is largely the case. However, our survey also picked up that outliving assets is a concern among a growing, and not that small, minority of this market. For example, the percent agreeing with the statement “I am very concerned about outliving my money in retirement” has grown steadily from 32% in 2001 to 39% today.
The toll on consumers retirement nest eggs by the bear market is also apparent in our trend numbers. For example, the last 2 years of the study have demonstrated a significant increase in the percentage of the high net worth who agree with the statement “I feel I need to make up for lost time in saving for retirement.” This number now stands at 33% compared with 25% in 2000.
Great Expectations Persist
In general, the high net worth expect to retire early, with a comfortable standard of living. Despite growing concerns regarding retirement security, the numbers below show the high net worths expectations regarding retirement remain high.