What Are Atlantans’ Stances on Retirement, Healthcare, and the Possibility of Living to 100 years old?

The latest iteration of the Merrill Lynch Affluent Insights Survey (MLAIS), released today, reveals new insights about Atlantans’ perspectives on retirement, healthcare, and the possibility of living to 100 years old.

Atlanta residents continue to redefine retirement – the majority (78%) plan to work part or full time in retirement, and only 21 percent define retirement as “never working again.”

While many Atlanta individuals surveyed feel thankful (35%) or optimistic (25%) about the prospect of living to 100 years old, 77 percent admitted they would approach money management differently if they knew today that they were going to live that long.

According to the survey, Atlantans are concerned about outliving their assets (64%) and affording the lifestyle they want in retirement (56%), and the rising cost of healthcare continues to be their number one concern (77%). However, despite their continued concern, more than two-thirds (69%) have not estimated what their healthcare costs might be during retirement years.

Within the full survey findings below, you’ll see Atlanta residents offer solutions for fixing Social Security, disclose what’s top of mind for them heading into the Presidential election, and reveal what would encourage them to invest more for their retirement.

Merrill Lynch Affluent Insights Survey™ – Atlanta

Atlanta investors plan to work part or full-time in retirement, and only “retire” when they feel they have saved enough to support their desired retirement lifestyle.

• As it stands today, 78 percent of local respondents see themselves working part or full-time in retirement. Only 21 percent define retirement as “never working again.”
• When asked what they expect most will lead them to retire, only ten percent of Atlanta non-retirees cited “hitting a certain age.” They believe the number one factor that will lead them into retirement is feeling their assets will allow them to live the lifestyle they want (33%) during their remaining years.
• The majority of local investors are concerned about whether their retirement assets will last throughout their entire lifetime (64%), and more than half (56%) are concerned they won’t be able to afford the lifestyle they want during retirement.
• If given the choice, nearly half of local respondents (49%) not yet retired would rather retire later than make trade-offs to their current lifestyle. On the other hand, 43 percent said they would make trade-offs today in order to retire when and how they’d like to.
• One-third (36%) of all local respondents lack confidence that their current saving and investment strategy will support their desired lifestyle during their retirement years.  When asked about the reasons for their uncertainty, 50 percent said the recession took a toll on their finances, 34 percent cited uncertainty about whether programs such as Social Security and Medicare will be there when they need them, and 29 percent cited a lack of savings. These statistics are far higher than the national average and all other sampled markets (30%, 19%, and 18% nationally, accordingly).
• While it is commonly known that many Baby Boomers are struggling to save for and fund their retirement, Atlanta respondents believe investors under the age of 35 won’t have it any easier when it comes to saving for retirement (80%).

Local respondents are more concerned than ever with the financial implications of healthcare costs in retirement, but few have begun to plan for it.

• Despite the rising cost of healthcare being their top financial concern in every MLAIS survey since 2009, more than two-thirds of local investors (69%) have not estimated what their healthcare costs will be during their retirement years.
• When asked how they plan to fund their healthcare costs in retirement, local investors said some combination of Medicare (41%), healthcare benefits from their current/former employer (39%), private health insurance, (38%) and long-term care insurance (28%).
• One-third (36%) indicated that they are more concerned about the financial strain and costs associated with a significant, unexpected healthcare situation such as a chronic illness or disability  than their quality of life being comprised from such an event.

Atlanta investors would approach money management differently if they knew today that they were going to live to be 100.

• Many local individuals surveyed feel thankful (35%) or optimistic (25%) about the prospect of living to 100 years old.
• However, 77% report they would approach money management differently if they knew today they were going to live to be 100. To financially accommodate a longer life, Atlanta investors would:

o   Work at least part-time during retirement (51%)

o   Pay off mortgage and other debt sooner (44%)

o   Work with a financial advisor to re-evaluate investments/savings (41%)

o   Adopt a more conservative investment approach (41%)

o   Purchase long-term care insurance (40%)

o   Contribute more to a 401(k), IRA or other retirement savings vehicle (39%)

o   Invest in a product that guarantees lifetime income, such as an annuity (38%)

Major issues to be debated by candidates among top concerns for local respondents

• Three out of four local investors (74%) are highly concerned about this year’s Presidential election. Among the major issues they find concerning today are also those likely to be heavily debated leading up to the election, including the rising cost of healthcare (77%), our nation’s budget deficit (75%), the lingering unemployment rate (72%), and the potential for rising tax rates (68%).
• Social Security reform is also a top concern in 2012, with 65 percent of those surveyed locally concerned about the program’s future. Additionally, the majority (53%) believe that the age at which Americans are eligible to collect Social Security benefits should be raised in light of longer life expectancies.
• Following a year of global economic instability, Atlanta investors also cited the following among concerns in 2012:

o   Our nation’s political standing with the world (63%)

o   The possibility of a double dip recession (62%)

o   The European financial crisis (60%)

Atlanta investors resolve to improve their financial future in 2012, but are hoping the economic, market and political environment will lend a hand too

• When asked what would encourage them to start saving or investing more for their retirement, local respondents cited:

o   A less volatile stock market (48%)

o   Improvement in the job market (47%)

o   A change in U.S. political leadership (42%)

o   More international economic stability (38%)

o   Greater incentives from their employer, such as implementing/increasing a 401(k) match (38%)

o   Better incentives from the government, such as raising 401(k) contribution limits or offering greater tax incentives for long-term saving and investing (36%)

• Many are balancing competing goals in the current economic environment, trying to pay down debt, while saving for retirement. Thirty-seven percent of Atlanta investors believe that their current level of debt impedes them from saving as much as they’d like to for retirement, more than in any other market sampled.

Atlanta respondents cite financial advisors as the person they trust most to provide advice on retirement investments and their overall financial future – more so than their spouse/partner, family members or business colleagues

• When asked what retirement-focused topics they would like to discuss more with their financial advisor, they cited:

o   Managing cash flow and liquidity in retirement (37%)

o   How they hope to live their life during retirement years (37%)

o   The impact of rising healthcare costs on their retirement income (34%)

o   How to financially plan for the possibility of living to be 100 years old (30%)

o   Balancing/managing competing near- and long-term financial demands (27%)

o   Making better lifestyle choices today to benefit their long-term financial picture (27%)

o   Choosing the right Medicare coverage and other healthcare decisions (24%)

• Local investors said the best piece of advice they received from their financial advisor in 2011 was to “stay the course” with their long-term investment strategy (43%).
• When asked about qualities their financial advisor possesses that keeps them loyal to the relationship, local respondents said their advisor:

o   Understands and respects their preferred methods of communication, e.g. face-to-face, email, phone, social media (65%)

o   Understands their current financial situation (64%)

o   Provides relevant research and market insights to help them feel informed and in control (63%)

o   Holds industry certification or designations (61%)

o   Understands their goals, dreams, and personal values (58%)

About Merrill Lynch Affluent Insights Survey™

Merrill Lynch Affluent Insights Survey™ is a report examining the values, financial priorities and concerns of affluent Americans. The survey was conducted by Ketchum Global Research & Analytics and Braun Research over the phone between December 14 and December 29, 2011 on behalf of Merrill Lynch Global Wealth Management. The nationally representative sample consisted of 1,001 affluent Americans (ages 18+) with investable assets in excess of $250,000. At least 300 affluent Americans were oversampled in each of the 5 target markets including Atlanta (303); Chicago (308); Dallas (308); Detroit (308) and San Francisco (300). The margin of error is +/- 3.1 percent for the national sample and +/- 5.7 percent for the oversample markets, with both reported at a 95 percent confidence level.