With life expectancies on the rise, 58 percent of affluent Americans believe they could live to be 100, according to the latest Merrill Lynch Affluent Insights Survey. Seventy-five percent of those surveyed said they would approach their money management differently if they knew today they were going to live that long.
To financially accommodate a longer life, 39 percent said they would continue to work at least part-time in retirement. Thirty-seven percent said they would work with their financial advisor to reevaluate their savings and investment strategies. Thirty-two percent said they would invest in a lifetime income product, such as an annuity or contribute more to a 401(k), IRA or other retirement savings vehicle. Twenty-nine percent said they would purchase long-term care insurance and 25 percent said they would retire closer to 85 than 65.
Nearly 60 percent of those interviewed also said that in light of longer life expectancies, they believe the age at which Americans can collect Social Security should be raised.
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Only 14 percent of respondents over the age of 50 cite "hitting a certain age" as the factor that would most lead them to retire. Instead, two factors more likely to lead them to retire include feeling confident that their assets will grant them the lifestyle they want throughout their remaining years (25 percent), and a possible health condition (18 percent) – their own or that of a family member.
"We hear from our clients that retiring isn't about their age or a magic number, but rather an ongoing assessment of the lifestyle, goals and assets they desire for their later years," said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. "And most don't view this life stage as a straight stretch of highway so much as a winding road that requires close attention and frequent course corrections."
More than half of affluent Americans said they would be willing to work longer if it meant they could retire and afford their current lifestyle. If they had to make trade-offs, 38 percent said they would trim day-to-day expenses; 35 percent said they would purchase fewer luxury items; 32 percent said they would limit their vacation budgets; 27 percent said they would keep the same care longer; 25 percent said they would leave less of an inheritance; and 24 percent said they would downsize their home.
Rising health care costs topped the list of financial concerns. Seventy-nine percent listed it as their top concern, but only 62 percent of respondents had actually tried to calculate how much money they would need for health care expenses in retirement.
Of those surveyed, women are more concerned than men about their retirement assets lasting throughout their lifetime. They also are more concerned about the future of Social Security benefits and about the prospect of caring for an aging parent.
The survey was conducted via phone by Braun Research in December 2011 on behalf of Merrill Lynch Global Wealth Management. The nationally representative sample consisted of 1,000 affluent Americans (over age 18) with investable assets in excess of $250,000.
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services.
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