Even Millionaires Worry if They Have Enough to Retire

Most high-net-worth individuals believe they will have enough to retire, but many still have lingering doubts.

A new study from Natixis Investment Managers examines what it means to be financially secure in retirement and if $1 million will be enough to last more than 25 years.

The report, “The million dollar question: How much do I need to retire?” surveyed 1,617 individuals who have accumulated $1 million or more in investable assets and who participated in the 2021 Natixis Global Survey of Individual Investors.

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The survey found that on the surface, most high-net-worth individuals (79%) say they will be financially secure in retirement, but deeper down they are far less confident. Millionaires were nearly as likely to say it will take a miracle to achieve a secure retirement (35%) as investors overall (40%). One key reason may be that the million-dollar mark may not be as significant as it once was, the survey adds.

“It’s not that a million dollars isn’t a lot—it’s still the qualifier for most definitions of high-net-worth individuals—it’s just that there are a lot more millionaires,” the report says. “In fact, Capgemini’s World Wealth Report shows that the number of individuals at this asset level globally has nearly doubled from 10.9 million in 2010 to 20.8 million in 2020. That report finds large numbers of millionaires in North America (6.98 million), Asia (6.9 million) and Europe (5.36 million).”

High-net-worth individuals reported that they have accumulated more than four times the median assets of the overall population ($2 million vs. $450,000)—but they are not as far ahead when it comes to retirement savings, the report says. HNWI report retirement savings of $625,000, which comes out to 2.5 times the $250,000 median retirement savings of the overall survey.

The survey also found that HNWI report saving an average of 19.4% of their income, that rate is still just under 3 percentage points higher than the overall average of 16.6%, the report says. While the numbers look good on their own, the difference between the savings of HNWI and the rest of the population surveyed “is not great enough to merit any substantial difference in sentiment,” Natixis reported.

The report found that 79% of HNWI say they will be financially secure in retirement—but they still have lingering doubts.

Employment raises several questions for HNWI, the report says. Even though they plan to retire at the relatively early age of 63, almost six in 10 (58%) say they accept the fact that they may have to work longer than they plan. The need to work beyond their planned retirement age may result from a variety of situations, including a change in finances, health issues that require extended insurance coverage, needing additional income to care for an elderly parent or support an adult child.

A late-career layoff, or stepping aside to care for family, can have just as much impact on retirement security, with 44% in the HNW group who worry they may not be able to keep working as long as they would like to, the report says. Thirty-six percent worry they may never be able to retire, while 42% are so worried they chose to not think about it altogether.

HNWI also worry about factors out of their control, such as whether or not public benefits will still play a factor into their retirement plans.

This has especially concerned the 38% of investors with more than $1 million in assets who say it will be hard to make ends meet without public benefits.

Nearly seven in 10 also see inflation as a threat, the report says. After experiencing the highest inflation in 40 years, investors are wise to recognize the impact that rising prices can have on their finances in retirement. Costs have increased for food, energy and health care, with 65% of this group worried that health care and long-term care costs will impact their financial security in retirement.