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US Investors Doubt They Will Live to 100

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Fifty-three percent of the world’s wealthy investors, on average, expect to live to at least 100, UBS Investor Watch research reported last week.

These longevity expectations varied widely by the countries in the study, with 76% of Germans looking forward to a very ripe old age versus only 30% of Americans.

Although 49% of U.S. investors said they wanted to live to 100, the survey reported several reasons why they were skeptical this would happen:

  • 93% said they were being realistic
  • 77% said average life expectancy was 80
  • 66% cited family history
  • 53% said health care would not be sufficiently advanced

American respondents were also the most worried about being able to afford a long life, with 69% citing the cost of health care, compared with 52% of the global sample.

“As much as investors look forward to living 100 years, the prospect is creating anxiety for them, too,” Paula Polito, global client strategy officer at UBS Global Wealth Management, said in a statement.

“Despite being wealthy, they still worry about difficult choices they may face, such as spending a portion of their children’s inheritance to pay for health care, or working longer to sustain their lifestyle over time. Already, we are starting to see longevity change long-practiced financial behaviors.”

UBS surveyed some 5,000 investors with at least $1 million in investable assets between December and April. The global sample was split across the U.S. and nine other markets: Germany, Hong Kong, Italy, Mexico, Singapore, Switzerland, Taiwan, UAE and the U.K.

More than 90% of both U.S. and global investors in the survey said their wealth enabled them to enjoy a healthier life.

They spend money on doctors’ visits and insurance premiums, as well as on preventive services, such as gyms, coaches, supplements and other “lifestyle” expenses. Millennials tend to spend more on these services than other generations, the results showed.

UBS noted that a smaller share of Americans’ total health spending than that of other investors goes toward preventive services — 37% versus an average of 46% — and more goes to direct health expenses — 63% versus 54%.

According to the study, 52% of U.S. investors believed that working longer was good for their health, much lower than the global average of 77%. For example, 93% of Hong Kong residents and 87% of Swiss respondents said working as long as possible was good for health.

Many survey respondents were actively taking steps to balance their work and personal lives, an area in which the U.S. lags. Whereas 62% of investors globally have stopped working on weekends, only 39% of the U.S. contingent said they had done so.

In addition, half of global respondents said they were not using work phones or email outside working hours, compared with just 29% of Americans.

The UBS survey showed that the growing expectation of living to 100 was changing investment behavior, though less so for Americans because of their doubts about living to an advanced age: 91% of investors globally versus 75% of U.S. investors.

Investors were doing such things as changing spending habits and financial plans and allocating to equities, bonds and real estate, which they considered strong long-term investment options, though many also said cash represented a good investment over multiple decades.

The survey results showed that living to an advanced age was even influencing the way wealthy investors planned their legacy, with 46% of U.S. investors expecting to give away more while they are still alive, compared with 62% globally.

This trend was especially notable in Switzerland, where 79% of respondents planned to give while living, and much less so in the U.S. and Mexico, where investors worry about outliving their assets.

Despite sundry financial challenges of living to 100 years old, 77% of American investors said good health still took precedence over abundant wealth. Although nearly the same percentage said they were happy with their health today, 57% worried that their health would deteriorate in the next 10 years.

UBS said it was not surprising, then, that the average wealthy U.S. investor would sacrifice 27% of his or her wealth to guarantee an extra decade of healthy life. Not only that, but 71% of Americans said they would rather live one year longer and leave a smaller inheritance than give up a year of life and leave a larger one.

Globally, the wealthiest respondents said they would willingly part with nearly half of their riches for an extra 10 years of healthy life. This number decreased by asset level, with investors in the $1 million to $2 million segment willing to give up only about one-third of their wealth for a decade of healthy living.

For their part, 56% of American investors said they were willing to live as long as they are mentally capable, even if their physical health should deteriorate, compared with just 29% who would choose to live longer if physically but not mentally capable.

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