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Financial Planning > Tax Planning

Spectrem: Rich Are Poor in Tax Savvy

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CHICAGO (–A Spectrem Group released report on the tax planning of affluent investors reveals that many households with US$500,000 or more in investable assets are missing out on significant tax-avoidance opportunities.

The report found, for example, that 68% of affluent investors have little or no knowledge of section 529 education savings plans, 62% are likewise uninformed about annuities, 64% about in-kind charitable contributions and 72% about Keoghs.

The report is based on survey responses from more than 500 affluent households, gathered by telephone interview in December 2004 and January 2005 as well as information from Spectrem’s “2004 Affluent Investor” quantitative report. The survey data have a margin of error of plus or minus 6 percentage points.

Earlier this month, Spectrem put out its latest index on the sentiment of affluent investors, finding that the post-election optimism has disappeared. Sentiment in this group fell from the mildly bullish reading of December into neutral territory in January.

The millionaire index for January, though, remained bullish. In terms of Spectrem’s metrics, the affluent are at 8; the millionaire’s (households with investable income of US$1 million or more) are at 20. This is the widest gap between the sentiments of the two groups since the indexes’ inception two years ago.

In a statement Feb. 2, the president of Spectrem, George H. Walper Jr., said it’s possible “January’s decline” in the affluent index is “simply a pause amid a broader return to bullishness,” but that the ultimate trend us unclear.

Contact Bob Keane with questions or comments at: [email protected].


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