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BMO Private Bank

March 25, 2015 09:15 ET

BMO Private Bank Study: Affluent Americans Plan to Retire Young and Stay Active

- High-net worth Americans plan to retire at an average age of 56

- The vast majority (96 percent) plan to spend their retirement in the U.S.

- More than half (53 percent) plan to continue working in retirement

CHICAGO, ILLINOIS--(Marketwired - March 25, 2015) - BMO Private Bank today released the results of a study examining what retirement looks like for affluent Americans (those with investible assets of $1 million or more). The study found that a majority plan to retire young and stay active in their later years. The study is a part of BMO Private Bank's Changing Face of Wealth series examining trends among America's affluent.

According to the study, wealthy Americans plan to:

  • Retire young: One-in-five plan to retire before the age of 40; the average age of retirement for high-net worth Americans is 56.
  • Live in the United States: Ninety-six percent of affluent Americans plan to live in the United States during retirement, with 81 percent planning to spend their time traveling.
  • Continue working: Twenty-one percent plan to continue earning an income in retirement through working part time; a similar percentage intend to start a new career (21 percent) while 11 percent hope to start their own business.

"It's great to see that high-net worth Americans have a positive outlook on retirement and plan to retire young and stay active during their golden years," said Darrel Hackett, President, BMO Private Bank. "Regardless of your income level, it's important to plan for your retirement future and have a wealth plan in place that includes a retirement component tailored to your specific situation and lifestyle."

Mr. Hackett also noted that previous BMO Private Bank research has shown that affluent Americans feel that they need, on average, $2.3 million to fund their ideal retirement lifestyle.*

Investing Profile of High Net-Worth Americans

The study also revealed that nearly all respondents (99 percent) say they currently have an investment portfolio or share one with their spouse, with an average value of $3.2 million. Forty-three percent of wealthy Americans have a portfolio that is worth more than $1.5 million.

The study found:

  • Eighty-five percent of affluent Americans plan to use money in their portfolio for retirement, with 45 percent planning to use it as an inheritance.
  • Only five percent consider themselves to be aggressive investors, whereas 42 percent are conservative and 53 percent are balanced.
  • Women have more money in their portfolios than men with women holding, on average, $4 million compared to $2.8 million for men.

"A balanced approach to investing is the safest way to ensure a valuable portfolio come retirement. Having lived and worked through the recession, we're seeing tomorrow's retirees step back and reevaluate the need for risk," noted Jack Ablin, Chief Investment Officer, BMO Private Bank. "Affluent Americans want to retire younger and do more, so they aren't willing to compromise their retirement income on riskier investments."

Survey results cited here are from online interviews with a sample of 493 Americans 18 years of age and older who have at least $1 million in investible assets. Surveys were conducted between October 15 and October 28, 2014.

*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.

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.

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