Whatever may have started the economic crisis, one thing for certain is times are changing because of it.
This week Bank of America announced findings from the latest Merrill Lynch Affluent Insights Quarterly, a survey of the values, financial priorities and concerns of affluent Americans and the challenges and opportunities they face.
"The survey, focused largely on retirement related issues, reveals that many affluent Americans are rethinking their vision of retirement and provides lessons from retirees on what they wished they had done differently when planning for retirement. Insights from the survey results will help the company better position products and solutions with consumers.
Conducted in December 2009 by Braun Research on behalf of Merrill Lynch Wealth Management, the survey sampled 1,000 affluent households across the country--individuals with investable assets in excess of $250,000. The research is the second in this series of quarterly surveys.
Among the key findings:
- Americans continue to feel the impact of the recession, with 68% of non-retired respondents indicating that the recession has taken a toll on their finances in some way.
- Despite the turmoil, 58% of respondents found some 'silver lining' in how the recession has affected their retirement planning and priorities, including: an enhanced focus on what will matter most in retirement, such as family and friends, taking their retirement planing off 'autopilot' and assessing what type of lifestyle they will be able to afford and maintain.
- However, many Americans (59% of retirees and 53% of non-retirees) are deeply concerned about the ramifications of rising health care costs.
- Other concerns among respondents include the potential for inflation, preserving inheritance for children and grandchildren, supporting philanthropic activities and caring for aging parents.
- Half of retired respondents indicated they would have focused less on the "numbers" and on hitting a specific nest egg dollar amount and more on specific life goals.
- Recommendations offered by retirees via this survey include: building a plan around what is most important to you in retirement, paying down debt and having a plan to manage retirement income throughout retirement.
- Only 31% of retired respondents worked with a financial advisor when planning their retirement in hindsight, more than half (55%) wished they had started doing so sooner.
"Helping our clients plan for retirement will continue to be a core focus for our business in the years ahead," said Sallie Krawcheck, president of Bank of America Global Wealth & Investment Management. "Our experienced financial advisors work closely with clients to establish a deep understanding of their lifetime aspirations. Through this personal approach, coupled with a sophisticated portfolio of investment and banking solutions, we strive to help clients minimize the complexity and uncertainty associated with retirement, allowing them to concentrate their efforts on what matters most."
"The recession has caused attitudes toward retirement to evolve at an unprecedented pace. For many, retirement is no longer a specific date at which an individual goes from working to not working to not working," said Andy Sleg, head of Bank of America's Retirement & Philanthropic Services. "Today, the transition into retirement is tending to be more gradual and fluid. An effective retirement strategy should go beyond an accumulation target and retirement income planning, and take into account what is truly important to an individual or couple, as well as the challenges they may face in the future.
Bank of America strives to be the customer's trusted destination for not only retirement planning but all their saving and investment needs, and continually wants to learn more about what is on customers minds.
"Understand our clients' retirement related realities and pursuits is a tremendous asset and helps us to guide them on their journey," said Claire Huang, head of Bank of America's marketing for Global Wealth Management, Global Banking and Global Markets. "Through continuously conducted surveys such as this, we have greater insight into their current priorities and concerns. These findings, along with our market research, help to position us for an evolving marketplace and able to offer appropriate solutions."
Advice from Retirees
Retirees were asked what advice they would give to those within 10-15 years of retirement and to those 15 plus years from retirement.
Within 10-15 years of retirement
- Build a plan around what is most important to you in retirement (51%)
- Have a plan to manage retirement income throughout retirement (47%)
- Pay down debt (40%)
- Account for unexpected costs and risks such as health care, cost of living and/or market fluctuations (38%)
- Pursue home ownership (24%)
- Be cautious of taking investment risks (21%)
More than 15 years to retirement
- Build a plan around what is most important to you in retirement (43%)
- Pay down debt (41%)
- Have a goal to manage retirement income throughout retirement (39%)
- Account for unexpected costs and risks such as health care, cost of living and/or market fluctuations (38%)
- Work with a financial advisor if you don't already (25%)
- Pursue home ownership (25%)
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