Data and Research

Retirement Planning Differs for Wealthy Versus Non-Wealthy Pre-Retirees

Savings level, not age, is the trigger for retirement for wealthy pre-retirees, and very few worry about outliving their assets.

By Rebecca Moore editors@plansponsor.com | July 20, 2017

Wealthy pre-retirees want to reach a certain asset level before they retire, while age is the trigger for pre-retirees with fewer assets, according to UBS Wealth Management Americas’ latest UBS Investor Watch report.

Although the ideal number varies slightly, nearly half of wealthy pre-retirees (45%) have a retirement savings target between $1 million and $3 million.

Nearly all wealthy pre-retirees (91%) believe they have the financial tools and knowledge necessary for a comfortable retirement, with 89% saying they are confident they will have enough money saved. In addition, 74% believe they know how long their savings will last once they retire.

For wealthy pre-retirees, emotional anxiety trumps financial concerns in assessing retirement readiness. Nearly two-thirds (64%) expect to miss their work schedule more than their salary.

Few wealthy retirees worry about money—only one in five worry about outliving their assets. However, 73% say getting sick is their top retirement concern. Nearly half (47%) are also worried they will not have anyone to take care of them.

The UBS findings also show investors are seeking to grow assets in retirement instead of following traditional asset allocation guidance to reduce equities with age. For instance, 84% of wealthy retirees plan to continue growing their assets over time, while 74% believe equities offer the best returns regardless of age. Most maintain or increase their equity exposure after retirement.

Once they have achieved the liquidity that makes them feel financially secure for retirement, many wealthy retirees focus on longevity needs, such as health care expenses, and building wealth for future generations. Contributing to this is the low interest rate environment, with 71% citing low rates as a reason to seek higher returns, even at an older age.

UBS surveyed 2,028 affluent and high net worth investors (with at least $1 million in investable assets) from June 8 to 13.

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