Reverse Mortgage Guide

Our slowing economy is having an impact on seniors. “One in four affluent 60-year-olds are changing their retirement plans and 40 percent “downsizing” their lifestyles,” according to an April national survey from Bell Investment Advisors.

The survey used a random sample of opinions from 500 adults comprised of 250 men and 250 women who were born in 1948 and have investable assets of $1 million or more. The poll was conducted by Opinion Research Corporation.

The major findings included:

Financial Stress Increases for One in Three Affluent Boomers

Survey findings revealed that almost 30 percent of affluent boomers have more financial stress now than they did six months ago. Affluent female boomers report considerably more stress than men (35% vs. 24%), while affluent boomers on both coasts–in the Northeast (36%) and West (34%)—report more stress than those in the Midwest (27%) and South (25%).

One in Four Affluent Boomers Affected by Job Loss

Over a fourth (28 percent) of affluent boomers have either lost their job in the last 12 months or know someone who is age 60 or over who has. The job losses have been more acutely felt by affluent boomers in the Northeast or Midwest (both 38 percent) and have had the least effect on those in the South (19 percent). More than one third (35%) of the most affluent boomers surveyed—those with more than $3 million earmarked for retirement—were affected by job loss, compared with just 24 percent of those with $1-3 million saved, and 30 percent of those with under a million saved for retirement.

Changes in Retirement Plans and Spending

Of the one in four boomers who are changing their retirement plans due to the economy, more women (31%) than men (19%) say they are making changes. Regionally, those in the Midwest are most likely to make changes to their retirement plans (31% vs. 25%). Male respondents are more likely than women to have decided to push their retirement plans further into the future, with those in the Northeast and West more likely to postpone retirement than affluent boomers in the Midwest and South.

Of the 40 percent of boomers who are reducing spending in response to the economy, the highest proportions are in the Northeast (50%) and the West (46%), compared with 38 percent in the Midwest and 33 percent in the South. Based on the survey, 47 percent of affluent boomer women are making lifestyle changes, compared with just one-third of men. Only four percent of the affluent boomers surveyed report having downsized housing in response to changes in the economy.

Affluent Boomers’ Seeking Higher Returns

Based on the survey, more than half (54 percent) of affluent boomers cited higher returns on investments as a primary goal for the next five years. “This finding underscores the fundamental lack of understanding many investors have about risk and return. Boomers will not achieve higher returns if they shift to more conservative investments as the survey findings suggest,” said Bell. He recommends that boomers retain a healthy portion of their assets in growth-oriented equities, so that their nest egg continues to grow.

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