BMO Examines Affluent Hoosier Retirement

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A report from BMO Private Bank examining retirement for the affluent suggests Indiana's wealthy believe they will need nearly $2 million to live out their ideal retirement lifestyle. The study also shows respondents, on average, plan to retire at the age of 59.

March 31, 2015

News Release

Indianapolis, Ind. -- BMO Private Bank today released the results of a study which provides a snapshot of what retirement looks like or will look like for high-net worth Hoosiers (defined as those with investable assets of $1 million or more). The study is part of a series examining trends among America's affluent.

According to the study, Indiana's wealthy:

--Will retire, on average, at the age of 59

--Believe they will need an average of $1.9 million to live out their ideal retirement lifestyle (lower than the national average of $2.3 million)*

--Plan to stay in the U.S. during their golden years (93 percent)

--Want to spend their retirement years travelling (83 percent), spending time with family (70 percent), volunteering (50 percent) and focusing on their hobbies (38 percent)

"It's critical to consider what you want your future to look like and ensure you plan for every aspect so you are well prepared for the years ahead," said Chad Cassinelli, Managing Director, BMO Private Bank. "Regardless of your income level, it's important that you spend the needed time to map out your retirement. Have an open discussion with your family and speak with a financial professional who can help you create a wealth plan that includes investing, philanthropic and estate planning components."

Investing Profile of High-Net Worth Hoosiers

The study also examined how affluent Hoosiers manage their finances. One hundred percent of respondents said they have an investment portfolio or share one with their spouse/partner. The average amount in their investment portfolio is $1.6 million, which is lower than the national average of $3.2 million. One third (30 percent) of Indiana's wealthy hold more than $2 million.

The state's affluent intend to use the money in their investment portfolios to:

--Fund their retirement (90 percent)

--Provide an inheritance for their family (40 percent)

--Use as income (28 percent)

According to the study, 63 percent of affluent Indiana residents consider themselves to be balanced investors, 30 percent are conservative and 8 percent are aggressive.

"A balanced approach to investing is the safest way to ensure a valuable portfolio come retirement. Having lived and worked through the recession, we're seeing tomorrow's retirees step back and reevaluate the need for risk," noted Jack Ablin, Chief Investment Officer, BMO Private Bank. "Affluent Americans want to retire younger and do more, so they aren't willing to compromise their retirement income on risky investments."

Key National Findings

On a national level, the study found:

--High-net worth Americans plan to retire at an average age of 56 and feel they need $2.3 million to live out their ideal retirement lifestyle.*

--Almost all (96 percent) will retire in the U.S. and would like to spend their golden years travelling (81 percent), with family (70 percent), on hobbies (47 percent) and volunteering (42 percent).

--The average amount of money high-net worth Americans hold in their portfolio is $3.2 million.

--In terms of how they intend to use the money in their investment portfolios, 85 percent plan to use the money to fund their retirement, 45 percent as an inheritance for their family and 24 percent as income.

--Over half of wealthy Americans with an investment portfolio consider themselves to be balanced investors, 42 percent are conservative and 5 percent are aggressive investors.

Survey results cited here are from online interviews with a sample of 493 Americans 18 years of age and older who have at least $1 million in investible assets. Surveys were conducted between October 15 and October 28, 2014.

*This survey result is from an online survey that was conducted by Pollara between March 28th and April 11th, 2013 with a sample of 482 American adults who have $1M+ in investable assets. The margin of error for a probability sample of this size is ± 4.5%, 19 times out of 20.

About BMO Private Bank, a part of BMO Financial Group

BMO Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high-net-worth clients. Through integrated teams of experienced financial professionals, BMO Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.

Source: BMO Private Bank

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