The majority of mass-affluent Americans not only plan to retire later than they had intended just a year ago, they are also more beset with worries about such major expenses as health care, college, and whether they will have enough money to last through retirement when they finally get there. So says the latest Merrill Edge Report.
The report, released by Bank of America on Thursday, focused on the financial worries and plans of the mass affluent—those with $50,000 to $250,000 in investable assets. Mass affluents may, at 28 million households, be the fastest-growing segment of the economy, according to Dean Athanasia, preferred and small business executive at Bank of America. But even with $9 trillion in assets, they aren’t happy campers.
“While the economy is showing signs of a turnaround, our data indicates the outlook among the mass affluent is not quite as positive,” he said, adding, “In spite of their increased efforts to get on track, this group is pushing back their retirement in greater numbers than we’ve seen before.”
More than half—57%—are postponing retirement; that’s up 36% from January of 2011. Thirty-four percent have resorted to using funds from their long-term savings or retirement money to handle short-term expenses, and 70% have resorted to do-it-yourself projects in the past year to save money, where in better times they would simply have hired someone to do the work.
Alok Prasad, Merrill Lynch executive, said that two factors bringing unexpected costs for the mass affluent are paying for their children’s weddings and dealing with the expense of having an adult child come home to live with them. “Both,” he said, “impact long-term retirement plans.”