What’s the Price of Retirement Confidence? Americans Who Have $250,000 or More in Investable Assets, a Wells Fargo Study Finds

As Americans emerge from the Great Recession, confidence in a future retirement sets in for people who have $250,000 or more in investable assets, according to the latest findings from the Wells Fargo Affluent Retirement Survey (NYSE:WFC), a telephone survey conducted by Harris Interactive of 1,800 Americans ages 25-75. While an overwhelming majority (88%) of affluent Americans (n=400 among those with investable assets of $250,000 or more) “feel confident” they will have saved enough for the life they want in retirement, far fewer Americans with less than $250,000 in investable assets (57%) (n=1,400) have confidence in their retirement savings. In this survey, a majority (61%) of the working affluent with $250,000 or more in assets had a household income of less than $150,000.

“What is striking about the ‘affluent’ is that their overwhelming confidence is not from guessing what they’ll need, but from disciplined saving, watching their spending and detailed planning,” said Karen Wimbish, director of Retail Retirement at Wells Fargo.

Affluent Americans Don’t Guess at What They Will Need to Retire

Almost three quarters (71%) of the affluent have a written plan for their finances in retirement compared to only 43% of those with less than $250,000 in assets. Moreover, a majority of the affluent (55%) indicate they used detailed planning and calculations to estimate the percentage of their current household annual income needed to live on in retirement versus about a quarter (24%) of those with less than $250,000 in assets. While a majority of the affluent take a methodical approach to retirement planning, a majority (73%) of Americans with less than $250,000 in assets “guess” the percentage of their current household income needed to support them in retirement.

Further evidence of the confidence among affluent Americans is that a strong majority (61%) say they have “no financial fears” concerning their retirement because they are confident in their planning and preparation, which is about twice the level of those (32%) with less than $250,000 in assets. Conversely, one third (33%) of the affluent “fear doing all the right things today but it still won’t be enough” for retirement compared to half (52%) of those Americans with less than $250,000 in assets. Moreover, while one-quarter (24%) of affluent Americans say they need to significantly cut back spending today in order to save enough for their retirement, half (50%) of those with less than $250,000 in assets indicate they will need to cut back spending.

When it comes to their current financial savings for retirement and expectations about finances in retirement, the affluent are more prepared than those with lower asset levels. In fact, the median amount already saved for retirement by the affluent is $500,000, which far exceeds the median ($60,000) amount that people with less than $250,000 in assets say they have saved for retirement.

A quarter (27%) of the affluent cite healthcare costs as their primary day-to-day financial concern as compared with 16% of those with less than $250,000, who instead say “paying the bills” is their primary concern (43%). The affluent estimate out-of-pocket healthcare expenses in retirement at $60,000 and those with less than $250,000 estimate $49,000.

“Although the affluent are more financially prepared for their retirement, both groups have grossly underestimated the healthcare expenses they will need in retirement,” said Wimbish. “They need to be more aware and plan for the real costs of healthcare in retirement.”

Investable assets <$250,000

(investable assets $250,000+)

Amount saved for retirement (median) $60,000 $500,000
Amount needed for retirement


$400,000 $750,000
Estimated out-of-pocket healthcare expenses in retirement (median) $49,000 $60,000
Number of years in retirement


20 years 25 years
Withdrawal rate from savings


10% 7%
% of current household income needed in retirement (median) 65% 60%

Affluent Have More Confidence in the Stock Market and Confidence from a Plan

Half (52%) of affluent Americans feel confident that the stock market is a good place to invest for retirement versus 35% of those with less than $250,000 in assets. Along these lines, if given $5,000 to invest for retirement, a plurality of affluent Americans (48%) would invest the money in stocks or mutual funds, compared to about a third (31%) of those with less than $250,000 in assets. Those with less than $250,000 in assets are more likely to put the money in a savings account or CD than would the affluent (32% compared to 18%) and are more likely to invest that money in gold/precious metals than the affluent (22% compared to 15%).

“The stock market may have felt like a roller coaster for some, but over the long-term, it has been an engine of growth and this has certainly been true in the last four years as we’ve emerged from recession. There is a paradigm shift where you no longer just switch to fixed income ten years before retirement. With increased longevity, there is more time to build assets in a well allocated portfolio and then turn that into retirement income,” added Wimbish.

‘Working until 80’ - A Reality for Those with Less Than $250,000 in Assets

Working in retirement due to financial necessity will be a reality for a third (34%) of Americans with less than $250,000 in assets, compared to only 9% of the affluent. More broadly, four-in-ten (42%) affluent Americans expect to work because they want to and not out of any financial need, compared to a third (32%) of those with less than $250,000 in assets. Interestingly, about half of affluent men (49%) say they will work in retirement because they want to versus 31% of affluent women. While half (48%) of affluent Americans plan to fully retire and not work, only one third (32%) of those with less than $250,000 in assets believe they will not work during retirement.

One quarter (25%) of Americans with less than $250,000 in assets agree they will need to work until they are “at least 80” in order to afford retirement despite the fact that only one-third (36%) think they will be mentally and physically capable of being a productive employee in their 80’s. Conversely, while only 6% of affluent Americans agree they will need to work until they are “at least 80” in order to afford retirement, close to half (43%) expect they will be physically and mentally capable of being a productive employee into their 80’s.

The 401(k), Social Security and Role of Individuals

About half of all Americans surveyed view the 401(k) as the best retirement savings vehicle when asked to select from a list of options (52% among affluent; 49% among those with less than $250,000 in assets). Not surprisingly, affluent Americans contribute a higher percentage of their salary (median=12%) to their 401k plan than those with less than $250,000 in assets (median=7%).

Additionally, affluent Americans expect Social Security to play a smaller role in their retirement than those with less than $250,000 in assets , who expect Social Security to cover a higher median percentage of their monthly retirement income (median=20% compared to 25%). However, both groups have similar expectations on the following:

  • When asked to assign a proportion of responsibility for funding their retirement, the majority (50%) assigned responsibility to the individual through saving and investment, followed by the employer though a pension (25%) and by the government through Social Security (20% by the affluent and 25% for those with less than $250,000 in assets).
  • They expect to begin taking Social Security payments at the median age of 65.
  • Similarly among those not retired, majorities of affluent (78%) and those with less than $250,000 in assets, (71%) believe they will have the option of delaying the age at which they begin taking Social Security so that they’ll receive higher payments.
  • Majorities of the affluent (54%) and those with less than $250,000 in assets (61%) are not willing to take a reduction in their Social Security and/or Medicare benefits even if it would help the country head towards a path to reduce its debt burden.
    • Affluent women (45%) are more likely to be willing to take a reduction in their Social Security and/or Medicare benefits than women with less than $250,000 in assets (30%), but there is no such difference among the men in both groups (36/37%).

For help understanding how to prepare for and live in retirement, visit Wells Fargo’s retirement site at https://www.wellsfargo.com/investing/retirement/ or visit the blog Beyond Today at https://www.wellsfargo.com/beyondtoday/.

About the Survey

On behalf of Wells Fargo, Harris Interactive Inc. conducted 1,800 telephone interviews among those aged 25-75 focusing on attitudes and behaviors around planning, saving and investing for retirement. Harris conducted 400 interviews among those with $250,000 or more in investable assets and 400 interviews among those with $100,000 to less than $250,000 in investable assets. The remaining 1,000 interviews were conducted among those who fell within specific income and wealth brackets (those aged 25 to 29 had 2011 household income of $25,000 to $99,999 and household investable assets of $99,999 or less and those aged 30 to 75 had 2011 household income of $50,000 to $99,999 or household investable assets of $25,000 to $99,999). Among the working affluent close to two-thirds (61%) had 2011 household income of less than $150,000. In comparison, 92% of those with less than $250,000 in investable assets who are not retired had 2011 household incomes of less than $150,000. The survey was conducted July 9 – Sept. 7, 2012.

Data were weighted as needed to represent the population of those meeting the qualification criteria. Figures for education, age, gender, race/ethnicity, region, household income, investable assets, number of adults in the household, and number of phone lines (to adjust for probability of selection) were weighted where necessary to bring them in line with their actual proportions in the population.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.4 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and has offices in more than 35 countries to support the bank’s customers who conduct business in the global economy. With more than 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 26 on Fortune’s 2012 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.

About Harris Interactive

Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant and consumer package goods. Serving clients in over 215 countries and territories through our North American and European offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us - and our clients - stay ahead of what's next. For more information, please visit www.harrisinteractive.com.


Wells Fargo & Company
Amy Hyland Jones, 704-383-4995
Allison Chin-Leong, 212-350-3824
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