Affluent Americans Would Rather Enjoy Money Now than Pass it On to Heirs

Money saved, rather than age, dictates the time an individual stops working, according to a majority of affluent Americans, according to a recent Wells Fargo retirement that challenges conventional wisdom about retirement.

Seventy-three percent of affluent Americans (defined as those with between $100,000 and $250,000 in investable assets) share the view held by middle class Americans that retirement is contingent on having saved a specific amount of money.

Even among affluent Americans, there is some unease about saving enough for retirement. About a quarter of respondents (23 percent) said they are not confident they will have amassed enough savings to stop working. This is felt more keenly among those at the lower end of the affluent spectrum, people without a retirement plan, and women, who are generally less confident investors than men, Twenty-one percent between the ages of 60 and 75 said they don’t know when they will be able to retire,

The survey also found a new attitude of enjoying one’s money today rather than amassing savings to pass on to heirs. Sixty-nine percent of respondents said they placed a higher priority of “using money now to experience with children” versus 22 percent who said they would save money to pass on to the next generation.

At the same time, 30 percent of these affluent Americans say they “accept” that they will not leave an inheritance to their descendents because they need the money for their own retirement. This percentage rises to 36 percent for those with $100,000 to $250,000 in assets, and falls to 25 percent of those with more than $250,000.

Women are more likely than men to expect they won’t be able to leave an inheritance (35 percent to 26 percent), an expectation most common among those in their 50s (38 percent). As Millionaire Corner previously reported, women are much less secure in their ability to retire comfortably. Men, on the other hand, are much less pensive about their prospects.

Affluent men surveyed have saved a median of $400,000 for retirement vs. $250,000 saved by affluent women. Fifty-seven percent expect to receive or already receive a pension, compared to 47 percent of women surveyed. Men are also more likely than women to say they will work in retirement because they “want to” rather than because they “need to.”

Men are also more bullish than women (51 percent vs. 42 percent) in their confidence in the stock market as a good place for retirement investments. Not surprisingly, those with investable assets of $250,000 or more and those with detailed written retirement plans also put more stock in the market.

Investors in this wealth level surveyed earlier this year by Millionaire Corner said they were mostly confident about having sufficient income to live comfortably during retirement, but there was some unease. Twenty-eight percent said that presently they were not saving enough to meet their financial goals, while 26 percent said they would be delaying their retirement and 16 percent have had to make early withdrawals from their retirement funds to meet present needs..