SOURCE: BMO Private Bank

BMO Private Bank

February 20, 2014 09:00 ET

BMO Private Bank Study: Affluent Floridians Say They Need an Average of $2.1 Million for Retirement

SARASOTA, FL--(Marketwired - Feb 20, 2014) -

  • Ninety-five percent of Florida's wealthy are confident in their ability to achieve their ideal retirement lifestyle
  • Ninety-six percent feel their children are prepared to manage their inheritance
  • Almost half (47 percent) believe their children will be better off financially than they are
  • Nearly three-fourths spend time talking to their kids about money management

According to a study released today by BMO Private Bank, high-net-worth Floridians (those with investible assets of $1 million or more) reported that they require, on average, $2.1 million to fund their retirement. This is $200,000 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 the Sunshine State's affluent are quite upbeat about their ability to save for retirement; nearly all (95 percent) feel confident about they will be able to afford their ideal retirement lifestyle, compared to 91 percent nationally.

"Floridians are feeling increasingly optimistic about their future as the economy continues to rebound and their investment portfolios begin delivering more solid returns," said Gary Heard, Sarasota Managing Director, BMO Private Bank.

Wealth and the Next Generation

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

  • Close to half (42 percent) of their wealth will be left to their children, 39 percent to a spouse or partner, 14 percent to other family members and just under 4 percent to charities.
  • For those with children, 48 percent say they spend time talking with them about finances.
  • Ninety-six percent feel their children are prepared to manage their inheritance.
  • Nearly half (46 percent) feel their offspring will be better off than they are.
  • Of the 35 percent who feel their kids will be worse off than they are, 75 percent attribute this to the state of the economy.

"Inter-generational finances tend to be complex, and every family situation is unique," said Mr. Heard. "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 highly recommended."

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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