Despite 70% of Millionaires Using a Financial Planner, One-Third May Outlive Savings — Here’s Why

Financial Planners

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Having net assets of $1 million or more doesn’t carry the same aura of extreme wealth that it used to, but it’s still a pretty tidy sum of money — especially considering that the average retirement savings in the United States is less than $90,000. Even so, a significant percentage of millionaires worry that the wealth they’ve built up won’t be enough to last their lifetimes, according to a report from Northwestern Mutual.

Northwestern’s 2023 Planning & Progress Study, based on a poll of 2,740 U.S. adults, found that one-third of millionaires surveyed think it’s possible they could outlive their savings. In this case, “millionaire” means you have more than $1 million in investable assets.

Nearly half of millionaires (47%) say their financial planning still needs improvement. That’s the case even though 42% consider themselves “highly disciplined” planners, which is more than twice the percentage of the general population. Odder still, 70% of wealthy Americans work with a professional financial advisor — and yet one-third still worry about running out of money in retirement.

Wealthy Americans May Not Be Convinced They’ve Got the Right Financial Planner On Board

One problem is that many wealthy people aren’t sure they’ve hired the right financial advisor in the first place. According to the Northwestern study, nearly half (48%) of wealthy people who work with an advisor said that if they were seeking a change, they’d choose another advisor who could offer more comprehensive financial guidance than their current advisor. About one-third (34%) would switch to someone who has a better understanding of their life stage and priorities.

“It’s wise for the wealthy to seek out a second opinion about the strength of their financial plans,” Northwestern exec Aditi Javeri Gokhale said in a news release. “Periods of uncertainty like the one we’re in now are spurring people to take inventory about the choices they’ve made and reconsider if their advisors are the right fit for them. As more affluent Americans intentionally seek out comprehensive financial advice instead of individual financial products, I expect to see this trend of second-opinion-seekers to grow.”

Also: 7 Surprisingly Affordable Places To Retire in Europe

The Northwestern study isn’t the only one to raise fears of retirees outliving their money. An earlier study from Cerulli Associates found that more than half (58%) of retirees and retirement savers worry about the possibility of outliving their assets, CNBC reported. It’s an especially big concern for baby boomers and Gen Xers who have either reached or are nearing retirement age.

These concerns have caused 46% of workers to retire later than expected to meet income or savings needs, according to Cerulli’s research.

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