Emotional anxiety overtakes financial concerns
with two-thirds of wealthy pre-retirees saying not having a set
work schedule would be a harder adjustment
Healthcare remains a top concern for wealthy
investors
Key findings:
- Two-thirds of wealthy pre-retirees are
focused on reaching a certain asset level instead of a specific age
before retiring.
- 89% of wealthy pre-retirees express
confidence in having enough money saved to be financially secure,
but most worry about the emotional adjustment of retirement.
- 84% of wealthy investors are happier
than ever in retirement, reaching peak satisfaction in their
sixties and seventies.
- 73% of wealthy retirees say getting
sick is their greatest retirement fear. Less than 50% feel secure
about long-term care planning after retirement.
UBS Wealth Management Americas (WMA) today celebrates the
twentieth issue of UBS Investor Watch with its latest report
entitled “Retiring old clichés.” The quarterly survey, which polled
over 2,000 affluent and high net worth investors, reveals that
financial security is only part of the decision-making process when
it comes to retirement. Emotional anxiety trumps financial concerns
when deciding to leave the workforce with many wealthy investors
saying that a lack of a set schedule, missing colleagues and a fear
of losing purpose keeps them from making the leap into
retirement.
Redefining retirement readiness
Wealthy pre-retirees want to reach a certain asset level before
they retire. In contrast, age is the trigger for pre-retirees with
fewer assets. 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. Other
emotional concerns include the adjustment to retired life (59%),
leaving work colleagues behind (57%), experiencing an initial shock
(39%), losing a sense of purpose (36%) and filling the hours of
free time (34%).
“Baby Boomers have been known for 'living to work,' having been
focused on their careers for so many years. Even once they achieve
financial security, their emotional attachment to work keeps many
Boomers on the job,” said Paula Polito, Client Strategy Officer of
UBS Wealth Management Americas. "Now, as many of them look toward
retirement, they need to start 'working on living,' - figuring out
how they will fill their time and find their purpose once they
leave the workforce."
Wealthy investors reach peak happiness in retirement
In stark contrast to the fears of pre-retirees, most retired
investors adjusted quickly and easily to retired life. One wealthy
retiree compared retirement to being young again, "but with money
and no curfew."
Half of wealthy retirees took no time at all to adjust to
retired life. Another third took less than a year. A full 84% of
wealthy retirees say they are happier than at any point in their
lives. In fact, if today’s retirees had the chance to do it over
again, only 19% would have delayed their retirement.
“Based on the experience of current retirees, wealthy
pre-retirees can lay their fears to rest," said Sameer Aurora, head
of Client Insights. "Most investors are happier in retirement than
they have ever been."
Still healthy and on solid financial footing, 90% of wealthy
investors are very satisfied with life in their sixties and
seventies—higher than investors in any other age group, including
those in their thirties (68% satisfied) and forties (83%
satisfied).
Health and long-term care are top concerns for wealthy
retirees
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. Consistent with
UBS’s last Investor Watch report “On your mark…,” one of wealthy
investors’ top expectations of the administration is to address
healthcare.
Retirees shun traditional asset allocation guidance in
retirement
The UBS findings also showed that 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 healthcare 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.
“This report confirms much of what clients have already been
sharing with us and helps to shatter some of the conventional
wisdom on how the wealthy view retirement," said Mike Ryan, Chief
Investment Officer, Wealth Management Americas.
About UBS Investor Watch
UBS Wealth Management Americas surveys U.S. investors on a
quarterly basis to keep a pulse on their needs, goals and concerns.
After identifying several emerging trends in the survey data, UBS
decided in 2012 to create the UBS Investor Watch to track, analyze
and report the sentiment of affluent and high net worth investors.
For more information on Investor Watch, visit
ubs.com/investorwatch.
Methodology
For this twentieth anniversary edition of UBS Investor Watch, we
revisited the retirement concepts first introduced in the 2013
Investor Watch report titled “80 is the new 60.” This year, 2,028
affluent and high net worth investors (with at least $1 million in
investable assets) were surveyed from June 8 – 13 2017, including
475 with at least $5 million. With 94 survey respondents, we
conducted qualitative follow-up interviews.
Notes to Editors:
About UBS Wealth Management Americas
Wealth Management Americas is one of the leading wealth managers
in the Americas in terms of Financial Advisor productivity and
invested assets. Its business includes UBS’s domestic U. S. and
Canadian wealth management businesses, as well as international
business booked in the U.S. It provides a fully integrated set of
wealth management solutions designed to address the needs of ultra
high net worth and high net worth clients.
About UBS
UBS provides financial advice and solutions to wealthy,
institutional and corporate clients worldwide, as well as private
clients in Switzerland. The operational structure of the Group is
comprised of our Corporate Center and five business divisions:
Wealth Management, Wealth Management Americas, Personal &
Corporate Banking, Asset Management and the Investment Bank. UBS's
strategy builds on the strengths of all of its businesses and
focuses its efforts on areas in which it excels, while seeking to
capitalize on the compelling growth prospects in the businesses and
regions in which it operates, in order to generate attractive and
sustainable returns for its shareholders. All of its businesses are
capital-efficient and benefit from a strong competitive position in
their targeted markets.
UBS is present in all major financial centers worldwide. It has
offices in 54 countries, with about 34% of its employees working in
the Americas, 35% in Switzerland, 18% in the rest of Europe, the
Middle East and Africa and 13% in Asia Pacific. UBS Group AG
employs approximately 60,000 people around the world. Its shares
are listed on the SIX Swiss Exchange and the New York Stock
Exchange (NYSE).
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version on businesswire.com: http://www.businesswire.com/news/home/20170720005216/en/
For UBS Wealth Management AmericasMaya Dillon,
212-713-3130Mobile: 917-615-7094Maya.dillon@ubs.com
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