You would think that those with $10 million dollars or more sitting in the bank and in assets would feel quite optimistic about their financial future, but according to a recent study performed by the U.S. Trust Bank of America Private Wealth Management, only 40% feel secure about the future. San Diego investment advisor for JKL Wealth Management, John Lohrenz, discusses these results with us today and in Part 2 of this blog post series.
About the Survey
2013 Insights on Wealth and Worth was conducted using a study sample of 711 affluent Americans all of whom were either sitting with $3+ million or were considered “ultra-wealthy” with $10 million or more in investable assets. Each of the people surveyed were required to answer a questionnaire regarding how they feel about their current financial situation and their financial future.
The Results of U.S. Trust Bank’s Survey for the “Ultra-Wealthy”
- 40% of the “ultra-wealthy” respondents do not feel secure when they consider their financial future.
- The primary concern of these individuals (77%) is that they will not benefit from sufficient income during retirement.
- The next concern (36%) is that a single terrible event could turn around their financial situation.
- Other worries included uncertainty about keeping their jobs and their potential for earning as they near or enter retirement.
- 22% of respondents were concerned that they would not be able to maintain the lifestyle they have grown accustomed to.
What Does This Mean?
“Feeling insecure about the future isn’t necessarily reflective of financial instability,” explains San Diego investment advisor for JKL Wealth Management, John Lohrenz. “Quite the contrary, it may be a good thing because it indicates the ambition of the individual to maintain a certain lifestyle well into retirement and for as long as they continue to live. For those who do have $10 million and more, this could mean frequent travelling, perhaps some sailing, golfing, eating out at nice restaurants, treating the grandchildren to lavish gifts at Christmas and even all of the above.”
“You may feel secure right now with $10+ million in investable assets, but your lifestyle could quite easily be compromised should something happen and become a drain on these savings. This is why the right investment strategy is so important,” explains this San Diego investment advisor. “Essentially, what you want to do is set up an investment strategy that will provide you with a steady income so that you can do all the things you’ve ever wanted to do, no matter how lavish, exorbitant or costly. This is precisely what we try to achieve for our clients here at JKL Wealth Management: A stress-free retirement and the standard of living you’ve become accustomed to and have earned through life-long hard work.”
The Survey Examines Tax Issues
- Only a quarter of the “ultra-wealthy” respondents actually understand how tax changes might affect the return they receive on their investment portfolio. The remaining 75% do not feel well informed at all.
- 68% of those with $10+ million have no investment strategy or financial plan to minimize the impact of tax on their income.
“As an individual with such an accumulation of assets, it is important that you understand how tax changes might implicate you, your nest egg and the income it will provide you once you retire,” explains JKL Wealth Management’s San Diego investment advisor. “And this is precisely what your financial advisor is there to do. If you don’t feel well informed, your advisor is not doing his or her job. You should also have a plan in place to minimize the impact of tax on your income, so be sure to have this conversation with your investment planner. Alternatively, we welcome you to give us a call using the contact details below.”
Stay Tuned for the Part 2
To find out how those with $3+ million in investable assets did in the survey, stay tuned for the second installment of this two-part blog series, courtesy of San Diego investment advisor for JKL Wealth Management, John Lohrenz.
If you have any questions at all or would like individualized investment advice from our San Diego financial advisor, please contact JKL Wealth Management at:
Phone: (858) 535-1705
Fax: (858) 535-1701
Alternatively, fill out the Contact Form and we’ll get back to you shortly.
731 S. Hwy 101, Suite 2K, Solana Beach CA 92075