Millionaires hesitant about achieving secure retirement

Around a third of high net worth investors say it will take a miracle to achieve a secure retirement, despite having over a $1 million or more in investable assets, according to Natixis Investment Managers.

The report surveyed over 1,600 individuals who had more than $1 million or more in investable assets.

Over three-quarters said they would be financially secure in retirement but 35% said it would take a miracle to achieve a secure retirement. This was a similar rate to those with far fewer assets (40%).

Respondents had a median retirement of $625,000 and 19.4% of their income saved, only slightly higher than the median average of 16.6%.

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There were significant concerns about how long they expected to work with 58% saying they had accepted they may need to work past 63, 36% worried that retirement is not an option for them, 38% saying it will be hard to make ends meet and 44% worried they may be forced to retire early.

The report said: “Any number of factors could demand working more years than planned: a change in finances, health issues that require extended insurance coverage, needing additional income to care for an elderly parent or support an adult child.

“But as much as having to work longer can be an unforeseen challenge, 44% in this group worry they may not be able to keep working as long as they’d like. A late career layoff, or stepping aside to care for family can have just as much impact on retirement security.”

2022 was also a difficult year to retire thanks to inflation and interest rates both rising which meant they could be taking an income from a smaller retirement pot.

“Those opting to retire in 2022 will not only be taking income from a retirement pot that could be down 10%– 20% or more, but higher costs will mean they have to take more from their pot to cover expenses and will need to go beyond the traditional 4% plan.

“With their savings depleted faster than anticipated, it will be hard for retirees to recover their assets, as they have less time and may have a lower risk tolerance.”