Even Wealthy Are Feeling Squeezed by Inflation, Phoenix Survey Shows |
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Written by U.S. Insurance News
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Monday, 12 May 2008 |
The eroding effect inflation has on investors’ nest eggs is gaining the attention of America’s millionaires.
That’s one of the conclusions drawn from the ninth edition of the Phoenix Wealth Survey, recently released by Phoenix Companies Inc., whose clientele consists of consumers with a high net worth.
Survey results are reflective of today’s volatile economy and are in stark contrast to the 2007 survey, which found record-high levels of optimism among the country’s millionaires. For example, last year 81 percent of respondents reported feeling wealthier than in the previous year, but this year only 54 percent made the same claim. One-fourth of those surveyed said they are “very optimistic” about their financial future, down from 34 percent last year.
Other highlights of this year’s survey include: - 58 percent say the U.S. economy is in a downturn and the worst is yet to come.
- 62 percent of high-net-worth individuals say less than 100 percent of their current income will constitute a comfortable standard of living in retirement, up 10 percent from 2007.
- 40 percent of high-net-worth individuals worry their assets will be depleted too quickly or they won’t be able to live comfortably on their retirement income, up from 36 percent last year.
- Half of those surveyed say they are worried that inflation will erode the value of their income.
- 39 percent fear diminished assets due to poor investment performance.
- 50 percent say they rarely seek professional advice when it comes to making major financial decisions.
- 41 percent—a record high—report that they do not have a primary financial advisor.
- 49 percent believe real estate is a safer investment than the stock market, and 45 percent see it as a better investment than the stock market.
The survey also uncovered the views of the wealthy regarding estate planning, especially in light of the fact that in 2010, current federal estate tax laws will change, unless Congress extends them. More than half of those surveyed—and especially the wealthiest individuals—indicate that estate planning is more important than ever before. However, 22 percent of high-net-worth individuals (and 43 percent of those with $3 million or more in net worth) say they have put off or delayed doing any estate planning.
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