Millennials with more wealth are more pessimistic about their retirement than those with less, a TD Ameritrade Institutional survey has found.
The survey, which asked millennials about their plans for their financial futures, divided respondents into three groups: high-net-worth millennials, who have more than $500,000 to invest; potential HNW millennials, who have less than $500,000 of investable assets but earn more than $150,000 per year; and mass-affluent millennials, who earn less than $150,000 and have less than $500,000 to invest.
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Despite the differences in the three groups' net worth and earnings, they shared common worries about retirement — whether they might outlive their savings, that they'll need to work longer to have enough money in retirement and whether they'll be able to pay healthcare expenses. While HNW millennials were less worried about what it might cost to pay for the care of an elderly parent or relative, they were still mindful of the expense.
Among the less-wealthy millennials, optimism was higher than among the wealthy, with almost two-thirds of the potentially wealthy being optimistic about their financial prospects compared with only half of those who are already wealthy. The wealthy were also more pessimistic about being able to achieve financial goals (26 percent) than the potentially wealthy (5 percent).
Retirement also figured higher in the potentially wealthy's minds than in those of the wealthy.
While the "high potential" and mass-affluent millennials define financial success as having saved enough money for a "comfortable" retirement, the wealthy wanted more: not depending on a job for income, having enough to indulge in luxury items and setting aside money for retirement and education.
The potentially wealthy among respondents expect to work longer and to need more money for retirement, citing as a goal an average retirement target age of 60.1 years, while the already wealthy are focusing on retirement by 56.8 years old.
The potentially wealthy also believe they'll need $5 million to be able to retire; the wealthy think they'll only have to hit $4.5 million before leaving the workplace.
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