Personal Finance


January 15, 2010


Krawcheck says 53% of wealthy fear outliving savings

A majority of wealthy Americans said theyíre concerned that they won’t have enough retirement income to last through their lifetimes, according to a Bank of America Corp. survey.

The survey said 53 percent are concerned about making sure retirement assets will last. Fifty-nine percent of retirees also said rising health-care costs are a concern. More than half of non-retired respondents made some adjustments to their lifestyles last year, such as spending less on personal luxuries or giving less to charities, and 29 percent said they expect to retire later than originally planned, the study said.

“Helping our clients plan for retirement will continue to be a core focus for our business in the years ahead,” Sallie Krawcheck, president of global wealth and investment management for the Charlotte, N.C.-based bank, said in a statement.

The results are from a December phone survey conducted by Princeton, N.J.-based Braun Research, a marketing research firm, which contacted 1,000 Americans with investable assets of at least $250,000.

Spectrem survey

In a separate November survey of 523 households released last week, high-net worth families said they're becoming more hands-on with their finances.

Households with a net worth from $5 million to $25 million invest 47 percent of their assets themselves, with no professional help, compared with 18 percent of assets given to advisers with the families offering no direction, according to Spectrem Group, a Chicago-based consulting firm.

There were 837,000 households in the $5 million to $25 million net-worth range at the end of 2008, compared with 1.16 million in 2007, according to Spectrem. There are about 6.7 million households that have from $1 million to $5 million in assets, the firm said.

The high-net worth households also changed their mix of investments, according to the study. They have fewer holdings in alternative investments, stocks and bonds and mutual funds, and increased investments in 401(k) plans, managed accounts, real estate and cash.

“America's wealthiest investors have backed away from risk during the recession in surprising numbers,” said George Walper, president of Spectrem Group. “They are also keeping a strong hand in the management of their assets.”

Use of advisers

Sixty-seven percent of retirees in the Bank of America survey said they didn't work with a financial adviser for retirement planning. Fifty percent of non-retirees said they use an adviser and 44 percent said they intend to work with a financial adviser to determine how to increase their 401(k) assets when they retire.

U.S. direct-contribution retirement plans, which include 401(k) and other employer-sponsored retirement programs, held about $3.6 trillion as of mid-2009, according to the Investment Company Institute, a mutual-fund industry trade group based in Washington. That accounts for 25 percent of total U.S. retirement assets.

The average 401(k) fund balance dropped 31 percent to $47,500 at the end of March 2009 from $69,200 at the end of 2007, according to a Fidelity Investments review of 11 million accounts it manages. The average balance of the Fidelity accounts recovered to $60,700 as of last Sept. 30 as the stock market rebounded and people kept contributing to their plans.


January 15, 2010