SOURCE: BMO Private Bank

BMO Private Bank

February 20, 2014 09:00 ET

BMO Private Bank Study: Affluent Arizonans Say They Need an Average of $2.3 Million for Retirement

SCOTTSDALE, AZ--(Marketwired - Feb 20, 2014) -

  • Ninety percent of Arizona's wealthy are confident in their ability to achieve their ideal retirement lifestyle
  • Ninety-three percent feel their children are prepared to manage their inheritance
  • One-third believe their children will be better off financially than they are
  • Nearly half spend time talking to their kids about money management

According to a study released today by BMO Private Bank, high-net worth Arizonans (those with investible assets of $1 million or more) reported that they require, on average, $2.3 million to fund their retirement. 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 90 percent of Arizona's wealthy feel confident about their ability to achieve their ideal retirement lifestyle, compared to 94 percent nationally.

"High-net worth Arizonans have become increasingly confident about their personal financial situation since the economy started rebounding a few years ago and their portfolios started delivering higher returns. This is being reflected in their optimistic outlook about retirement," said Jason Miller, CFP®, Director, Financial Planning (Western U.S.), BMO Private Bank. "Following the volatility from the recent past, we are also seeing more affluent families taking steps to educate their children further about managing their wealth and inheritances, which is also a very positive development."

Wealth and the Next Generation

The study also examined issues related to the inter-generational transfer of wealth and found that, among the affluent Arizona residents with children:

  • More than one-fifth (22 percent) of their wealth will be left to their children, 68 percent to a spouse or partner and 3.5 percent to charities.
  • For those with children under the age of 18, 12 percent spend "a lot of time" talking to their kids about money management.
  • Ninety-three percent feel their children are prepared to manage their inheritance.
  • Thirty-three percent feel their offspring will be better off than them.
  • Of the 42 percent who feel their kids will be worse off than them, 71 percent feel this will be because of future economic conditions.

"There are many complexities with inter-generational finances, and every family situation is unique," said Mr. Miller. "The earlier a family is committed to educating the next generation, the better off they will be when the transfer of wealth occurs. Professional guidance is crucial."

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 them.
  • Of the 35 percent who feel that their kids will be worse off than them, 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.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S.

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