&l;!–donotpaginate–&g;&l;p&g;You&a;rsquo;d think that having at least $1 million in the bank would allay concerns about the financial implications of old age, but it seems as if wealthy investors are a worried bunch. More than half of wealthy investors globally expect to live for 100 years, and the prospect of living that long creates financial anxiety, UBS reports in its first global Investor Watch, The Century Club.
&a;ldquo;&a;rsquo;Can I afford to live that long?&a;rsquo; It&a;rsquo;s one of the questions that people are struggling with,&a;rdquo; says Tom Naratil, co-president of global wealth management at UBS.
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Longevity is a hot topic&a;mdash;if a tough topic&a;mdash;for financial advisors and their clients. &a;ldquo;In order to help clients create financial plans that make them feel comfortable, we have to bring up topics that make them feel uncomfortable,&a;rdquo; Naratil says.
How optimistic or realistic investors are varies greatly by country. Three-quarters of Germans said they expect to live to 100 compared to 30% of Americans. UBS surveyed 5,000 investors (2,000 in the U.S.) with $1 million or more in investable assets
The rich worry about healthcare costs, having less wealth to pass on to heirs, and needing to work longer to maintain their lifestyle. They worry about their mental health deteriorating, and being a burden on their loved ones.
If they had to choose between wealth and health, health wins. The wealthiest&a;mdash;those with $50 million or more&a;mdash;would part with half of their wealth to guarantee an extra 10 years of healthy living. Investors with $1- to $2 million would sacrifice a third of their wealth.
What are the implications for planning? Nearly two in three investors are already working beyond traditional retirement age, or would consider doing so, in order to maintain their lifestyle, UBS found. &a;ldquo;If I knew I would live to 100, I would carry on working for longer,&a;rdquo; said one 66-year-old man from the U.K.
Still, retirement might be a lot longer than you think, Naratil says. So, it&a;rsquo;s important to think about a longevity portfolio that can outpace the rate of inflation. He says he talks to clients about delaying the traditional shift to fixed income as you age, and maintaining a higher percentage of equities for a longer period of time. He also has clients investing in longer duration assets like private equity and venture capital. &a;ldquo;Are we planning a bit shorter than we should be?&a;rdquo; he asks.
There isn&a;rsquo;t any one particular age to plan to. But the question–How long do you expect to live?&a;mdash;is a good place to start.&l;/p&g;