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Retirement aims top legacy objectives among the affluent

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Which of the following financial goals do high-net-worth investors rank as their top priority?
1) Saving for retirement 
2) Leaving a legacy to heirs

Believe the answer to be (2)? Think again. According to a new TIAA-CREF survey, generating income in retirement and accumulating savings in retirement are the top priorities for, respectively, 50 percent and 41 percent of affluent investors. By comparison, just 5 percent of affluent investors identify leaving a legacy as a top priority.

The report, “TIAA-CREF Affluent Investor Barometer,” polled 1,242 household financial decision makers who have $250,000-plus in investable assets. The survey aimed to assess respondents’ attitudes, preferences and behaviors related to financial planning and investing.

The report observes that 6 in 10 affluent investors use the services of a financial advisor. This compares to 39 percent of the general population.

A similar majority than 6 in 10 (63 percent) of those polled say they are bullish on the economy. The sentiment is more evident among men than among women (73 percent versus 51 percent).

Wealthier investors have a more positive outlook on the economy than those who have less in assets, the survey adds. When asked what would be most likely to make them feel less confident about the economy, respondents cited:

  • Geopolitical instability (28 percent)

  • Market volatility (24 percent); and

  • A rise in the unemployment rate (17 percent)

These concerns, the report adds, also vary in degree by gender and wealth.

“Men worry more about geopolitical instability, while women are more concerned about market volatility,” the report states. “Investors with $5 million or more in investable assets are far more concerned about a decrease in equity prices (17 percent versus 5 percent of all respondents).”

See the charts beginning on the next page for additional highlights from the TIAA-CREF survey.

As the chart below shows, many affluent investors meet with advisors well in advance of retirement. Six in ten did so before age 45. Only 14 percent say they waited until they approached retirement (age 55 to 64) to begin consulting with an advisor.

Nearly 6 in 10 (57 percent) of survey respondents cite their financial advisor as their most reliable source — significantly more than financial newspapers (23 percent) and financial websites (20 percent).

Many of these investors look to their advisors for reassurance when financial markets are in flux: 53 percent of respondents with an advisor say they took no action during recent market volatility because their portfolio was positioned to ride it out, compared to 41 percent of respondents without an advisor. Additionally, 23 percent of respondents with an advisor say getting one was the smartest financial move they had ever made.

Stocks (76 percent) and mutual funds (73 percent) are the most common investments within individuals’ investment vehicles, followed by bonds (41 percent).

Affluent investors who use advisors overwhelmingly say they are helpful in determining which investment vehicles are appropriate for their goals (97 percent) and recommending how to divide investments among asset classes (97 percent). Ninety-one percent say those advisors are helpful in evaluating the tax implications of investment decisions.

See also:

UBS report flags financial concerns of the high-net-worth

How (and how not) to reach the HNW retiree market

Confessions of a Hollywood elite advisor


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