SOURCE: BMO Private Bank

BMO Private Bank

February 20, 2014 09:00 ET

Affluent Hoosiers Report They Need an Average of $1.9 Million for Retirement: BMO Private Bank Study

INDIANAPOLIS, IN--(Marketwired - Feb 20, 2014) -

  • Ninety-five percent of Indiana's affluent are confident in their ability to achieve their ideal retirement lifestyle
  • Wealth & the next generation: 83 percent feel their children are prepared to manage their inheritance
  • Forty-four percent believe their children will be better off than they are financially

According to a study released today by BMO Private Bank, affluent Hoosiers (those with investible assets of $1 million or more) reported that they require, on average, $1.9 million to fund their retirement. This is $400,000 lower than the national average of $2.3 million. The study is the fourth in a series by BMO Private Bank examining trends among the affluent in the United States.

The study also found that an overwhelming 95 percent of Indiana's affluent are feeling confident about their ability to achieve their ideal retirement lifestyle. This compares to a 94 percent confidence rate nationally.

"Clearly affluent Hoosiers are feeling pretty upbeat about their ability to afford the retirement they want," said Chad Cassinelli, Managing Director, Indiana Region, BMO Private Bank. "But no matter your income level, it's important for all of us to begin planning for our financial goals, including retirement, as soon as possible. This will help and protect our investment portfolio from market fluctuations by ensuring they're well diversified in order to manage risk."

Wealth and the Next Generation

The study also examined issues related to the inter-generational transfer of wealth. It found that, among those affluent Indiana residents with children:

  • Twenty-one percent of their wealth will be left to their kids.
  • Eighty-three percent feel that their children are well prepared to handle their inheritance.
  • Seventy-seven percent spend time talking to their kids about money management.
  • Only a quarter (26 percent) feel their children will be worse off financially than they are, nine percent lower than the national average.
  • Of those who feel that their kids will be worse off than they are, 78 percent believe it is because of the economic situation.

"While the economy certainly is a factor in how well a person does financially, his or her level of financial literacy is critical. It's very encouraging that so many respondents indicated that they're taking the time to educate their children about money matters," said Mr. Cassinelli. "Starting early to teach children about finances can make a big difference in how financially successful they are later in life."

Key National Findings

High-net-worth Americans and Retirement:

  • Affluent Americans require, on average, $2.3 million to fund their retirement.
  • Almost all (94 percent) are feeling confident about their ability to achieve their ideal retirement lifestyle.

Wealth and the Next Generation:

  • The vast majority (85 percent) of high-net worth Americans feel their children are well-prepared to handle their inheritance. 
  • Affluent Americans will leave more than one-third (36 percent) of their wealth to their children.
  • Seventy percent spend time talking to their kids about money management and almost half (43 percent) feel that their offspring will be better off than they are.
  • Of the 35 percent who feel that their kids will be worse off than they are, 63 percent believe that this will largely be because of the future state of the economy.

About BMO Private Bank, a part of BMO Financial Group
BMO Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high-net-worth clients. Through integrated teams of experienced financial professionals, BMO Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.

The online survey was conducted by Pollara between March 28th and April 11th, 2013 with a sample of 482 American adults who have $1M+ in investable assets. The margin of error for a probability sample of this size is ± 4.5%, 19 times out of 20.

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