Zurich, 19 April 2018 – An increasingly strong belief that they will live to 100 is driving significant changes in spending, investing and legacy behavior by the world’s wealthy.
This is the key finding from UBS Investor Watch, the largest recurring global study of High Net Worth Individuals (HNWIs)* in the world, which covers the views of just over 5,000 people globally.
“As much as investors look forward to living 100 years, the prospect is creating anxiety for them, too,” said Paula Polito, Global Client Strategy Officer and Group Managing Director, UBS Global Wealth Management. “Despite being wealthy, they still worry about difficult choices they may face, such as spending a portion of their children’s inheritance to pay for healthcare, or working longer to sustain their lifestyle over time. Already, we are starting to see longevity change long-practiced financial behaviors.”
Dramatic differences between countries
Over half of wealthy people now believe they will live to 100, which is markedly above current life expectancy forecasts in most developed countries. However, the outlook for longevity varies by country, region and wealth level. In Asian markets, about half of wealthy investors think they will reach 100, while in continental Europe the percentage is markedly higher. In the U.S., however, only 30% of investors believe they will live 100 years.
Believe money will help them live longer
Driving longevity expectations is a fundamental connection between health and wealth. A full 92% of investors say money helps them live a healthier life. In fact, the very wealthiest investors expect to live the longest—and they are the most willing to sacrifice wealth for better health.
Investors spend almost as much on gyms, coaches and supplements as they do on doctors’ visits and insurance premiums. Millennials tend to spend more on these preventative services than other generations.
Work is a major factor as well
The study’s findings reveal that work is a major force as well. Nearly eight in 10 global investors believe working is good for their health. Too much work, however, can have the reverse effect. Particularly in Asia, investors are making efforts to scale back. In a culture known for its work ethic, more Asian investors are taking weekends off, respecting holiday time, and turning off phones and e-mail with greater frequency.
Strategy and legacy
The 100-year life is changing investment behavior. Nine in 10 investors are taking steps in response to increasing life expectancy, such as adjusting spending habits and financial plans, and allocating their wealth to long-term investments. Equities, bonds and real estate are seen as strong places to invest long-term, though a large minority still believe cash represents a good investment over multiple decades as well.
Investors who expect to live longer are the most likely to make financial changes. Those least likely are in the U.S. and the U.K., where less than a third of investors are counting on a 100-year life.
Living to an advanced age is even impacting the way wealthy investors plan their legacy. Many are starting the process earlier, with nearly two-thirds planning to give more wealth away while they’re still alive.
Health trumps wealth
Despite all the financial challenges of living a 100-year life, however, good health still takes precedence over abundant wealth, according to HNWIs. A full 90% of investors say investing in their health is more important than growing their wealth. Indeed, the average wealthy investor would sacrifice over a third of their wealth today if that could guarantee another ten years of healthy life. The very wealthiest investors would sacrifice about half their wealth.
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