The Wealthiest Americans Don't Retire


 “When I am wealthy enough, I am going to retire.”

Perhaps. And perhaps, not.

Spectrem’s recent study of investors with a net worth over $25 million – The Wealthiest Americans – reveals that for some people, retirement is not the end-all of life.

While most Americans believe that one of the great rewards of acquiring significant wealth is the opportunity to stop working at a regular job or worrying about generating income, the fact is that some of the wealthiest investors don’t consider retirement as the reward. Some of them don’t consider retirement at all.

And the wealthier the investor, the less likely they are to be considering retirement.

“It’s one of the most remarkable research insights we have gathered,’’ said Spectrem president George H. Walper Jr. “The research is dramatic in the story it tells. For those who can easily retire, retirement is not the final goal.”

Spectrem’s study surveyed investors with a net worth of $25 million and more, and 58 percent of them were not retired, and the majority of the ones who were retired were over the age of 66. Only 12 percent of investors under the age of 50 with a net worth over $25 million were retired, and only 26 percent of those between the ages of 51-65 were retired.

And the wealthier among the wealthy? Sixty-seven percent of investors with a net worth over $125 million were not retired. In fact, 14 percent of that segment were semi-retired. Only 18 percent of those with a net worth over $125 million had chosen to retire.

Just to make the point as clear as possible: more investors with a net worth below $25 million are retired than those above that figure, by percentage. Among Ultra High Net Worth investors with a net worth between $5 million and $25 million, 58 percent are retired. Among Millionaire investors with a net worth under $5 million, only 49 percent are retired. But that is still more than the 28 percent of the Wealthiest Americans who are retired.

Of those wealthiest investors who are still working, 20 percent say they never plan to retire. Almost half (46 percent) say they will retire more than 10 years from now.

Of course, the wealthiest Americans still working with a net worth over $25 million may not be working the same way less wealthy investors do. But retirement means not having a job to go to or deal with, and wealthy Americans don’t seem to mind being in that employment situation.

It is not as if these investors are not set for retirement. Seventy-nine percent of the wealthiest Americans have an employer sponsored defined contribution plan such as a 401(k), and the average value in those accounts is just under $7 million. Seventy-three percent have contributory IRAs with a mean value of $6.4 million, and 71 percent have rollover Ira’s worth just over $6 million.

Apparently, when retirement does not seem possible from a financial standpoint, it is a frequent dream. When retirement would be easily managed from a financial standpoint, it is not the dream it might seem to be otherwise.

Top Takeaways for Advisors  

When working with investors with a significant net worth who are still working, advisors must determine what that investor thinks in regard to retirement plans. For some investors, there must be a reason they don’t choose to take the path of retirement so many investors with lower net worth would take in a minute if they could. The reasoning for staying in the workforce can have a major influence on investment decisions, especially when looking at retirement income plans.


©2017 Spectrem Group