Posted on Nov 26, 2020, 5 p.m.
We recently came across an article from UBS Investor Watch which provided some very interesting survey data about health, wealth, and longevity.
In this survey, UBS explored the interplay among health, wealth, and longevity of more than 5,000 high net worth investors from Hong Kong, America, Germany Switzerland, Taiwan, Italy, Mexico, Singapore, the UK and UAE with at least $1 million to $50 million-plus in investable assets.
Based on their findings more than half of the wealthy investors expect to live 100 years, but this expectation does vary significantly by country: three-quarters of those in Germany project reaching the age of 100 and less than one-third of those in America think that they will live that long. However, regardless of how long they anticipate living, 9 out of 10 investors believe that health is of paramount importance considering health to be more important than wealth. But they do recognize a connection between health and wealth with nearly all saying that wealth enables them to live a much healthier life.
Even with the overall confidence in living linger many are anxious about the financial implications of old age with healthcare costs being the top concern. Many are also concerned about having less wealth to pass on to the next generation and having to work longer to maintain their lifestyles, and they have already started to adjust their financial holdings and inheritance planning in the face of these concerns.
53% of the global wealthy investors of both genders expect to reach the age of 100, which is higher than the current 80-year life expectancy in most developed countries in which women live longer. This projection varies by country and region as more than two-thirds of those in continental Europe expect to live to 100, in Asian countries only around half have that same expectation, and in America and the UK less than one third think that they will become centenarians.
Even though these global investors are very wealthy they still worry about being able to afford the costs of having a 100+ year life with healthcare costs topping the list of concerns. 52% of these wealthy investors worry about increasing medical expenses with those in America (69%) being the most anxious and those in Germany(35%) seeming to express the least concern. After healthcare, they worry about having less wealth to pass on to successors and need to work longer.
Being healthy is the top priority among these wealthy global investors with 90% reporting that health is more important than growing wealth. Yet 92% acknowledge that their wealth enables them to live a healthier life as they can afford to spend on appointments, insurance premiums, extra preventive services, gyms, trainers, coaches, supplements, and other lifestyle-enhancing expenses.
The wealthiest of the wealthy are spending the most money in attempts to preserve their health, with annual healthcare expenditures for those with over $10 million being 4 times more than those of less fortunate but still wealthy investors. Additionally, the wealthiest are also more willing to sacrifice wealth for health with those in the $50 million-plus tertile reporting that they would be willing to part with nearly half of their wealth for an extra 10 years of life. But this number decreases by asset level with those in the $1-2 million tertile being willing to only give up around one-third of their wealth for that extra decade of living healthy.
8 in 10 (77%) investors believe that work has positive effects on health, this sentiment is more common in Hong Kong (93%) and Switzerland (87%) but less common in America (52%)and the UK (59%). But this work attitude may be necessary as most believe that they will have to work longer in order to afford their years ahead with 2 in 3 (63%) already working past traditional retirement ages or considering doing so to maintain their lifestyle.
Although in general wealthy investors see work as good for health, they are actively taking steps to balance work and personal lives by reducing the number of hours worked, and not working weekends and holidays. However, those in America (39%) are the least likely to cut back on work. Across all age groups, millennials are the most committed to maintaining this balance and are the most likely to have made changes such as taking sabbaticals.
9 in 10 are taking steps in expectation of an increased lifespan such as adjusting spending habits and financial plans, and allocating wealth to long-term investments. Those who expect to live longer are the most likely to make changes, those in the UK and American are the least likely to make financial changes as less than one third expect to live to reach 100 years old. Real estate, equities and cash are among the top 3 asset classes for their long-term investing.
Extended longevity is affecting more than their investment approaches, it is also changing their legacy planning with nearly 2 in 3 planning to give more of their wealth away while they are still alive to experience watching their heirs enjoy it. This giving while living trend is the most prevalent in Switzerland(79%) and Hong Kong (71%) but less common in Mexico (47%) and America (46%) where these investors cite concerns about outliving their assets.
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This article is not intended to provide medical diagnosis, advice, treatment, or endorsement