Affluent Boomers Express Top Retirement Concerns

Although more affluent investors are choosing to work in retirement to supplement their income, few are choosing to meet more often with their adviser, a study by Cogent Research says.

Maintaining a current standard of living is the top concern among affluent investors age 45 to 65, according to recent Cogent Research. The study, The Retirement Income Dilemma, examines the behaviors and attitudes of pre-retirees. According to a release about the results, the top 10 investor concerns are:

  • fear about not maintaining current standard of living;
  • healthcare/prescription costs;
  • availability of Social Security;
  • outliving assets;
  • inflation of U.S. dollar;
  • market conditions/performance during retirement;
  • leaving legacy for children/heirs;
  • impact of taxes on income;
  • paying for children’s education; and
  • caring for elderly parents.

Unlike previous generations, nearly 20% of American pre-retirees expect to continue working in retirement in order to supplement their retirement income or provide reasonable insurance coverage, the release says. However, less than 1% choose to meet their advisers more often to discuss their investment options.

Lacking a Plan

Only half (51%) of affluent investors have actually completed a detailed retirement income plan, according to another Cogent Research study.

Predictably, the number of affluent investors with a retirement plan increases among those closer to retirement. Yet 31% of those born between 1925 and 1945 still do not have a plan. Among those born between 1946 and 1955, 42% lack a retirement income plan, and the number is even higher at 53% for those born between 1956 and 1964.

“The fact that even the most affluent of investors amongst us show clear signs of anxiety, confusion, and lack of direction suggests a budding retirement income crisis here in America,’ said Alan White, project director of Cogent Research, in the release. “Furthermore, it is clear that financial advisers and asset management firms have a long way to go in terms of proving themselves as resources to investors.”

The Retirement Income Dilemma is based on a series of focus groups among affluent ($250,000 in investable assets) and high-net-worth investors ($1,000,000 or more investable assets) aged 45 to 65. The groups were further segmented by investors who are at or near retirement and others who see a retirement horizon five to 10 years out. Focus groups were also conducted with advisers across all distribution channels.

See also: Affluent Boomers Look Outside the Plan.