Affluent Americans have figured out how to make money, but a big chunk of them aren’t sure how to make it last through retirement. A survey released Wednesday by Natixis Global Asset Management found 16% of investors with more than $1 million said they don’t have enough money to put some away for the future. Almost one-third of investors with between $200,000 and $1 million say they don’t have enough money to set aside savings.
Natixis surveyed more than 460 investors and found that 27% of Americans with at least $200,000 in investable assets aren’t sure how much they should save. Additionally, 18% of wealthy investors over 50 and 22% of investors with more than $1 million don’t know how much they need for retirement.
“Advisors are finding themselves in the business of cash flow management,” Tracey Flaherty, senior vice president of retirement strategies for Natixis Global Asset Management, told AdvisorOne on Friday. “They’re helping their clients reduce spending and do a better job of cash management. Especially in the case of retirees, many advisors will put their clients on a budget.”
Part of investors’ unwillingness to save certainly comes down to a preference for spending, especially among investors with less than $1 million. Overall, 18% of investors said they’d rather spend today than save for tomorrow, but 22% of investors with between $200,000 and $500,000 agreed. Among investors with more than $1 million, 13% said they’d rather spend than save.
Flaherty also said that some people may be under the impression that affluent investors ”know what they’re doing” when it comes to investing, “but that may not be the case.”
Communication is key, she said. “Advisors should have regular meetings on their plan with all their clients,” she said.
Tax time, she said, is the perfect opportunity to sit down with clients and make adjustments to their plan. “There are easy things they could be doing,” Flaherty said, “like maxing out their 401(k) contribution, catch-up contributions, contributing to their IRAs.”