Wealthier individuals are preoccupied with their eventual ability to retire comfortably, even if they have $1 million or more in assets, according to data on such US investors from a survey conducted by Natixis Investment Managers.
Sixty-five percent of this group said they worry that inflation and increasing healthcare and long-term care costs will affect their financial security in retirement. Depending on where they live, that could come at a significant cost. The Lincoln Financial What Care Costs analysis released this summer found that assisted living rates now average more than $51,000 annually.
“In abstract terms, seven figures may sound like an audacious goal that, once achieved, should put investors on the road to a secure retirement,” wrote the authors of the survey report. “In reality, though, a cool million may be only table stakes in funding a retirement that could last 25 to 30 years.”
Natixis Investment Managers surveyed 1,617 individuals who already have accumulated $1 million or more in investable assets who had previously participated in the 2021 Natixis Global Survey of Individual Investors. About a third (35%) of the millionaire respondents said that it would “take a miracle” to achieve a secure retirement (35%), according to the report.
“One key reason may be that the million-dollar mark may not be as significant as it once was,” the authors wrote.
With record inflation and fluctuating interest rates, 2022 is a bad time to retire, according to Natixis.
“Those opting to retire in 2022 not only will be taking income from a retirement pot that could be down 10% to 20% or more, but higher costs will mean they have to take more from their pot to cover expenses and will need to go beyond the traditional 4% plan,” the authors wrote. “With their savings depleted faster than anticipated, it will be hard for retirees to recover their assets, as they have less time and may have a lower risk tolerance.”
