Millionaires aren’t always confident about retirement, survey says 35% of millionaires have low confidence levels about living a comfortable retirement
According to a survey conducted and published by Natixis Investment Managers, 35% of millionaires agreed with the statement that “it will take a miracle to achieve a secure retirement” — a near match with the 40% of overall investors who agreed with that statement.
This mindset could stem, at least in part, from the fact that it’s becoming more and more common to be considered a millionaire — and being a millionaire doesn’t necessarily mean much in terms of being more prepared than others for retirement, according to the survey.
“It’s not that a million dollars isn’t a lot – it’s still the qualifier for most definitions of High-Net-Worth Individuals (HNWI) – it’s just that there are a lot more millionaires,” the survey states. “In fact, Capgemini’s World Wealth Report shows that the number of individuals at this asset level globally has nearly doubled from 10.9 million in 2010 to 20.8 million in 2020. That report finds large numbers of millionaires in North America (6.98 million), Asia (6.9 million) and Europe (5.36 million) alike.”
And while millionaires have money than most, it may not make much of a difference in terms of their outlook regarding a secure or comfortable retirement.
“Within the Natixis survey group, high-net-worth individuals report that they have accumulated more than four times the median assets of the overall population ($2 million vs. $450,000),” the survey states. “But when it comes to their retirement savings, they are not as far ahead.”
Per the survey, high net-worth individuals have a median retirement savings of roughly $625,000 — which is just 2.5 times the median savings of the overall population.
“Similarly, while an average retirement savings rate of 19.4% is impressive, it is still just under three percent higher than the overall average of 16.6%,” Natixis states. “As a result, it appears that while the numbers look good, the difference is not great enough to merit any substantial difference in sentiment.”
In terms of how this applies to reverse mortgages, recent developments could indicate that there is more room in the industry for a borrower pool with a higher net worth.
As of January 1, the Home Equity Conversion Mortgage (HECM) limit rose to over $1 million for the first time in the program’s history, and those with even higher value homes have the potential to be served by various proprietary reverse mortgage products with limits of up to $4 million.
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