New UBS Investor Watch Report Delves Into the Perceptions and Realities of Modern Retirement and Dispels Myths

NEW YORK, July 20 -- UBS, a financial services provider, issued the following news release:

UBS Wealth Management Americas (WMA) today celebrates the twentieth issue of UBS Investor Watch with its latest report entitled, "Retiring old cliches." The quarterly survey, which polled over 2,000 affluent and high-net-worth investors, reveals that financial security is only part of the decision-making process when it comes to retirement. Emotional anxiety trumps financial concerns when deciding to leave the work force with many wealthy investors saying that a lack of a set schedule, missing colleagues and a fear of losing purpose, keeps them from making the leap into retirement.

Redefining retirement readiness

Wealthy pre-retirees want to reach a certain asset level before they retire. In contrast, age is the trigger for pre-retirees with fewer assets. Although the ideal number varies slightly, nearly half of wealthy pre-retirees (45%) have a retirement savings target between $1 million and $3 million.

Nearly all wealthy pre-retirees (91%) believe they have the financial tools and knowledge necessary for a comfortable retirement, with 89 percent saying they are confident they will have enough money saved. In addition, 74 percent believe they know how long their savings will last once they retire.

For wealthy pre-retirees, emotional anxiety trumps financial concerns in assessing retirement readiness. Nearly two thirds (64%) expect to miss their work schedule more than their salary. Other emotional concerns include the adjustment to retired life (59%), leaving work colleagues behind (57%), experiencing an initial shock (39%), losing a sense of purpose (36%), and filling the hours of free time (34%).

"Baby Boomers have been known for 'living to work,' having been focused on their careers for so many years. Even once they achieve financial security, their emotional attachment to work keeps many Boomers on the job," said Paula Polito, Client Strategy Officer of UBS Wealth Management Americas. "Now, as many of them look toward retirement, they need to start 'working on living,'--figuring out how they will fill their time and find their purpose once they leave the workforce."

Wealthy investors reach peak happiness in retirement

In stark contrast to the fears of pre-retirees, most retired investors adjusted quickly and easily to retired life. One wealthy retiree compared retirement to being young again, "but with money and no curfew."

Half of wealthy retirees took no time at all to adjust to retired life. Another third took less than a year. A full 84% of wealthy retirees say they are happier than at any point in their lives. In fact, if today's retirees had the chance to do it over again, only 19% would have delayed their retirement.

"Based on the experience of current retirees, wealthy pre-retirees can lay their fears to rest," said Sameer Aurora, head of Client Insights. "Most investors are happier in retirement than they have ever been."

Still healthy and on solid financial footing, 90% of wealthy investors are very satisfied with life in their sixties and seventies--higher than investors in any other age group, including those in their thirties (68% satisfied) and forties (83% satisfied).

Health and long-term care are top concerns for wealthy retirees

Few wealthy retirees worry about money--only one in five worry about outliving their assets. However, 73 percent say getting sick is their top retirement concern. Nearly half (47%) are also worried they will not have anyone to take care of them. Consistent with UBS' last Investor Watch report "On your mark...," one of wealthy investors' top expectations of the administration is to address healthcare.

Retirees shun traditional asset allocation guidance in retirement

The UBS findings also showed that investors are seeking to grow assets in retirement instead of following traditional asset allocation guidance to reduce equities with age. For instance, 84 percent of wealthy retirees plan to continue growing their assets over time, while 74 percent believe equities offer the best returns regardless of age. Most maintain or increase their equity exposure after retirement.

Once they have achieved the liquidity that makes them feel financially secure for retirement, many wealthy retirees focus on longevity needs, such as healthcare expenses, and building wealth for future generations. Contributing to this is the low interest rate environment, with 71 percent citing low rates as a reason to seek higher returns, even at an older age.

"This report confirms much of what clients have already been sharing with us and helps to shatter some of the conventional wisdom on how the wealthy view retirement," said Mike Ryan, Chief Investment Officer, Wealth Management Americas.

Key findings:

* Two-thirds of wealthy pre-retirees are focused on reaching a certain asset level instead of a specific age before retiring.

* 89% of wealthy pre-retirees express confidence in having enough money saved to be financially secure, but most worry about the emotional adjustment of retirement.

* 84% of wealthy investors are happier than ever in retirement, reaching peak satisfaction in their sixties and seventies.

* 73% of wealthy retirees say getting sick is their greatest retirement fear. Less than 50% feel secure about long-term care planning after retirement.

About UBS Investor Watch

UBS Wealth Management Americas surveys U.S. investors on a quarterly basis to keep a pulse on their needs, goals and concerns. After identifying several emerging trends in the survey data, UBS decided in 2012 to create the UBS Investor Watch to track, analyze and report the sentiment of affluent and high net worth investors. For more information on investor watch, visit www.ubs.com/investorwatch.

Methodology

For this twentieth anniversary edition of UBS Investor Watch, we revisited the retirement concepts first introduced the 2013 Investor Watch report titled "80 is the new 60." This year, 2,028 affluent and high net worth investors (with at least $1 million in investable assets) were surveyed from June 8 - 13 2017, including 475 with at least $5 million. With 94 survey respondents, we conducted qualitative follow-up interviews.