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Various studies and surveys indicate that clients increasingly perceive “rich” and “wealthy” as distinct concepts, there are irrefutable links between the two and that’s apparent when it comes to retirement satisfaction. In simple terms, the more assets clients head into retirement with, the more likely they are to be content with their retirements.
Advisors are highly relevant in retirement because professional advice can go a long way with issues such as boosting and stretch retirement income, long-term care planning and insurance matters, just to name a few. Add retirement satisfaction to that list.
Obviously, what satisfies one client might not be enough for another, but advisors can take heart in knowing that there is some uniformity among clients that say they’re satisfied retirees. That uniformity comes by way of this equation: health + wealth = satisfaction. Let’s dive deeper into that concept below.
Health, Wealth Are Linked
When acknowledging that money is a prime source of stress for many people, it’s not surprising that certain asset tiers are conducive to higher levels of retirement satisfaction.
“Individuals in higher household-asset brackets were more likely to report being very satisfied with their retirement. For example, 73 percent of those with $500,000 or more in assets expressed high satisfaction, compared with 33 percent of those with less than $25,000 in assets,” according to a new study by the Employee Benefit Research Institute (EBRI).
Alright, so it’s not stunning that folks with more money report increased levels of retirement satisfaction, but health is part of this scenario. As the EBRI notes, 70% of those polled that said they’re in “excellent” or “very good” health say they’re satisfied with their retirement pictures compared to just 28% describing their health as “fair” or “poor.”
“When comparing individuals from the same wealth group, those in better health were more likely to be very satisfied with their retirement compared with those in poor health. Among people with the same health ratings, those with higher household assets were also more likely to be very satisfied with their retirement,” adds the study.
Indicating that plenty of clients likely have perspective on the importance of physical health, even wealthy clients are likely to be more satisfied with their retirements when good health is part of the equation. As noted by the EBRI study, folks in the $500,000+ in assets cohort that say they’re in strong health are more content with their retirements than their counterparts with health issues.
Yes, Health Can Be Wealth
“Health is wealth” is a familiar, arguably overused say, but it’s accuracy is undeniable. That said, advisors clearly aren’t doctors or healthcare professionals and prodding about clients’ personal health situations could appear meddlesome.
However, the EBRI findings are a call to other stakeholders to invest employee wellness because there are tangible benefits for employers and workers alike.
“It is important to recognize the link between health and wealth in retirement satisfaction when designing employee benefits,” observes Samita Thephasit, research associate, EBRI. ”Employers and benefits administrators should design plans that encourage annual checkups for both health and wealth. As well, it is crucial to ensure that employees not only understand the importance of health and wealth but also encourage them to consider how they will choose to spend their time in retirement to increase the likelihood of higher satisfaction in retirement.”