In November, 2008 Spectrem Group surveyed individuals with over $1 million in wealth qualitatively in focus groups in five cities: New York, Palm Beach, Seattle, Los Angeles and Chicago. Additionally, a quantitative online study was conducted with over 750 Millionaires. Even those at this level of wealth are feeling some drastic changes in their daily lives and certainly their long-term retirement plans. For 80% of Millionaires, this is the worst financial crisis they have ever experienced. Over 49% are changing their spending habits in the short term. Approximately 20% are being forced to delay their retirement. The largest percentage anticipates that the economy will not recover for at least two years.

The individuals whose plans are impacted most significantly by the economic crisis are those individuals who are within 5-10 years of retirement. Sixty-one percent of those individuals indicate that the financial crisis has seriously impacted their long-term financial goals. Over one-third of those who are not retired have changed their retirement plans and plan to retire later. Among those who planned to retire in 5-10 years, 45% have changed their retirement plans to later. Thirty-eight percent of those who planned to retire in less than five years have also changed their retirement plans and now plan to retire later. Among those who plan to retire in more than 10 years, 30% plan to retire later. The retirement plans of various professions of Millionaires are impacted differently; Professionals and Senior Corporate Executives are more likely than Business Owners to have changed their retirement plans and plan to retire later as a result of the crisis. Those with less wealth are more likely than those with more wealth to alter their retirement plans and retire later.

As a result of the crisis, investors are making changes in asset allocation as well. More than 50% of Baby Boomers plan on moving their portfolios to a greater concentration of cash. Clearly the Baby Boomers are realizing that they may have a difficult time maintaining their existing standard of living during retirement due to the significant losses to their portfolios. The challenge of this instinctive move is that investing in cash may not be the best way to grow their overall portfolios. Safety, however, is an important issue for these individuals who are still reeling from seeing their balances dip and dive. Though a shift is occurring from wealth accumulation to wealth preservation for almost all Millionaires regardless of age, the average plan participant may still need to grow their money to make up for their losses. Panic may ensue, across all wealth levels, when plan participants realize they still must accumulate to maintain their lifestyle.

Millionaire and other high-balance plan participants need to have their very real fears assuaged and a new and rethought retirement plan put into place. Postponing retirement may be a reality for many Americans, even the most wealthy, but making sure all plan participants know the best steps to take for their portfolios depending on their position in life and account balance is important. Now is not the time to misstep because of poor information, or panic.

For more information: Retain Your Clients During the Economic Crisis Retain Your Clients During the Economic Crisis

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