SOURCE: BMO Private Bank

BMO Private Bank

February 20, 2014 09:00 ET

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

MINNEAPOLIS, MN and ST. PAUL, MN--(Marketwired - Feb 20, 2014) -

  • Eighty-nine percent of Minnesota's affluent are confident in their ability to achieve their ideal retirement lifestyle
  • Wealth & the next generation: 80 percent feel their children are prepared to manage their inheritance
  • However, nearly half feel their kids will be worse off than they are

According to a study released today by BMO Private Bank, affluent Minnesotans (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 89 percent of Minnesotans are feeling confident about their ability to achieve their ideal retirement lifestyle. That compares to a 94 percent confidence rate nationally.

"It's encouraging to see that so many people in our state are confident about their ability to finance their retirement," said Steve Marsich, Managing Director, Minnesota Region, BMO Private Bank. "However, the fact that we're below the national average in our confidence about our ability to achieve our goals shows the importance of actively planning for retirement while individuals are in their top earning years."

Wealth and the Next Generation

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

  • More than a third (36 percent) of their wealth will be left to their kids.
  • Eighty percent feel that their children are well prepared to handle their inheritance.
  • Seventy-nine percent spend time talking to their kids about money management.
  • Only 27 percent feel that their offspring will be better off than they are.
  • Of the 48 percent who feel that their kids will be worse off than they are, 69 percent believe it is because of the economic situation.

"By and large, parents appear to have confidence in their children's ability to manage money," said Mr. Marsich. "But parents' concern about the economy demonstrates the critical nature of helping our children learn to manage money from an early age so that they're well positioned to manage the ups and downs of the markets as adults."

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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