UBS Investor Watch: 80 is the new 60
Investors are mentally prepared for a longer retirement, but are they financially prepared? Mike Ryan, Chief Investment Strategist, UBS Wealth Management Americas, discusses the truths and misconceptions about retirement on CNBC Power Lunch.
UBS Investor Watch asked 2,319 U.S. investors for their perspectives on retirement. They gave us some very surprising answers that may affect how you should be planning for your future.
What is “old”?
A generation ago, "old" was retirement age, but investors are telling us that old isn't a number. You’re not “old" until you lose individual independence, when you can’t do things for yourself. Seventy percent of us don’t expect that to happen until our 80s.
Retirement is one word, but three phases.
Since most investors aren't feeling old when they retire, many don't expect to quit work entirely when they reach retirement age. Nine in 10 under 65 expect their retirements will have three phases:
- Transition—reduce work hours, departure to start a new business, or increased volunteerism
- My Time—focus on travel and leisure activities
- The Last Waltz—slowing down with heightened focus on health issues and losing independence
Investors expect their financial needs to vary across the phases. However, they appear to underestimate the income they'll need for all three phases combined.
Retirement may last as long as 30 years.
We expect to live comfortably during retirement. Yet on average, investors still believe they will only need about 60% of their pre-retirement income to maintain their lifestyles. This is well below the standard industry estimate of 78%.
Pre-retirees guide financial decisions for multiple generations.
We’re preparing for a longer, more complex retirement, but also providing financial support and guidance to aging parents and/or adult children. Pre-retirees (age 50-64) are particularly likely to face the generational squeeze. Sixty-one percent have aging parents or young adult children; 15% have both. This can put a strain on retirement income if it's not taken into account.
Retirement is changing. Is it time you changed?
Retiring differently means investing differently—and more. From long-term strategies and multigenerational planning to retirement security. Rely on your UBS Financial Advisor to see beyond the markets and deliver what clients need most right now. Advice. Beyond investing.
Source: UBS Investor Watch, 4Q 2013
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