Rich Americans confident on money management, but not so much about retirement

Rich Americans confident on money management, but not so much about retirement
Affluent individuals estimate they’d need a $3M retirement nest egg, and just half are prepared to transfer their wealth.
JUN 17, 2024

A new study by First Citizens Wealth, the wealth management division of First Citizens Bank, pulls back the curtain on well-heeled Americans’ sentiments toward money management and planning for the future.

The "Beyond Wealth" study, which surveyed individuals with more than $500,000 in investable assets, revealed most are confident in their money management skills, but are less prepared for transferring wealth to heirs.

"Our inaugural study sheds new light on how affluent Americans are looking at their money management and their attitudes toward retirement, estate planning and wealth transfer," Michael Wilson, executive vice president and lead executive for First Citizens Wealth, said in a statement.

The study found that two thirds of affluent Americans believe they manage their finances better than others, with only 4 percent thinking they do worse. Beyond that, about half of the respondents not feeling stressed about their finances and three-quarters having an updated written financial plan.

However, the study hints at significant gaps when it comes to retirement and passing down their wealth.

While most affluent Americans expect to retire in their 60s, nearly 1 in 5 are uncertain about their retirement timing, with 44 percent saying the main issue is maintaining their lifestyle during retirement. All in all, they estimate they’d need $3 million to retire comfortably, twice the amount estimated by a recent Northwestern Mutual survey of Americans, and $5.5 million to retire and pass down wealth to heirs.

While nearly all affluent Americans (94 percent) plan to transfer wealth to their heirs, only 50 percent feel very prepared and have a written plan in place. About 44 percent have considered passing on their wealth but lack a formal plan. Additionally, only two-thirds have a will, and just 40 percent have an estate plan.

The survey also revealed a widespread appreciation for financial advisors. Nine-tenths of respondents (89 percent) acknowledged that they have generated more wealth with a professional advisor behind than they could have alone.

They also cite feeling more prepared for the future (66 percent), reduced stress (58 percent), saved time (45 percent), and being able to focus on what matters in life (43 percent) as key benefits of working with advisors.

"There is more conversation around wealth planning than ever, and younger generations are getting more involved through social media, podcasts and other digital platforms," Wilson added. While most affluent Americans start engaging with an advisor in their 30s on average, First Citizens found the average millennial gets started at age 29, compared to 36 for Gen X and 43 for baby boomers.

Latest News

Can advisors still cut through the noise in digital marketing?
Can advisors still cut through the noise in digital marketing?

With a fifth of RIA firms using AI to create marketing content, one leading voice argues a clear identity and focusing on clients will be crucial to success.

With wealth management market cooking, LPL Financial shares hit new highs
With wealth management market cooking, LPL Financial shares hit new highs

LPL Financial is a bellwether for the broader financial advice marketplace.

Wealth tech Alix raises $20M to expand AI-powered estate settlement platform
Wealth tech Alix raises $20M to expand AI-powered estate settlement platform

The San Francisco-based startup's Series A funding, with support from Schwab and Edward Jones Ventures, will reinforce its role in the coming $124 trillion wealth transfer.

Summit Financial adds four RIAs, nets $1.2B in new assets
Summit Financial adds four RIAs, nets $1.2B in new assets

The quartet of deals across New York, Florida, Ohio, and New Mexico reinforces the fast-growing integrator's leading position in the independent space.

Advisor moves: Raymond James welcomes UBS, Wells Fargo teams in bicoastal moves
Advisor moves: Raymond James welcomes UBS, Wells Fargo teams in bicoastal moves

UBS and Wells Fargo have made their own additions in the Northeast, including a Massachusetts duo defecting from Commonwealth.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.