Administration December 7, 2001

Financial Plan Pays Off For Double lncomes

July 12, 2001 (PLANSPONSOR.com) - Young affluent households equipped with a financial plan have average investable assets of $210,000, more than double those without a plan, a recent survey finds.
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And while most acknowledge that earned income is the engine behind that growth, nearly half (43%) noted employer equity as a contributing factor.

The number of US households with someone under the age of 40 taking home $100,000 or more, has risen by 1 million in the last four years, according to a new survey.

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The survey Movin’ on Up: A Profile of the Emerging Young Affluent, shows that last year there were 3.5 million US households at this income level or with a net worth of half a million dollars, an increase of 40% from 1997.

Despite their wealth, less than a quarter (21%) of the group have a financial plan, yet over 50% think they could use one.

Goal Oriented

Spectrem, a consultant specializing in the affluent and retirement markets, which conducted the survey, found that 72% of these young affluent households had two earners, up from 60% in 1997.

Among the young affluent surveyed:

  • over 80% said that earned income is the primary source of their wealth.
  • while 55% cited investment returns as a source of wealth
  • 83% had one or more dependent children

Not surprisingly, their two primary savings goals were:

  • assuring a comfortable retirement
  • paying for their children’s education

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