Investment Habits of Affluent Vs. Non-affluent Investors
Visit Original Napa Net Article
New research from Wells Fargo details the differences in the savings and spending habits of affluent investors (those with assets in excess of $250,000) and those with less than $250,000 in savings. Here are some of the key findings of the firm’s Affluent Retirement Survey:
- Most affluent investors are not high wage earners; rather, they are very methodical planners. They set a plan with a high savings rate and set an asset allocation for their savings, and then make minor tweaks to those allocations over time.
- Affluent investors believe that a 401(k) plan is the best place to save for retirement. They don’t believe that Social Security will contribute greatly to their income needs in retirement.
- Affluent investors seem to be underestimating the cost of health care in retirement.
- There’s a big difference in the investment habits of the affluent versus the non-affluent: More than 50% of affluent investors utilize equities as a large portion of their asset allocation, while just 35% of the non-affluent prefer stocks and would rather invest in cash, CDs, fixed income, etc. — a key point for many retirement plan advisors who are dealing mostly with less affluent investors.
