Retirement Shunned by 'Nevertiree' Wealthy, Says New Global Report

NEW YORK, Sept. 27 /PRNewswire/ -- Retirement is being rejected by a new breed of wealthy workers – the 'Nevertirees' - who want to carry on working for as long as they are able, says Barclays Wealth in its latest Insights report, The Age Illusion: How the Wealthy are Redefining Their Retirement.

Sixty percent of wealthy individuals polled in a global survey say that they plan to become a Nevertiree, shunning traditional retirement, instead continuing to work, start businesses and take on new projects in their later years.

The report, the 12th in the Barclays Wealth Insights series, is based on a survey of more than 2,000 high net worth individuals, who were asked to consider what retirement and later life means to them.

The findings show that the concept of nevertirement is expected to grow over the coming decades, with over 70% of respondents under the age of 45 saying that they will always be involved in some form of work.

Emerging markets such as Saudi Arabia (92%), United Arab Emirates (91%) and South Africa (89%) illustrated the biggest desire to keep on working in later life, however the concept is also popular in developed economies with the U.S. (54%), and the U.K. (60%) showing a desire to carry on working. Switzerland (34%), Spain (44%) and Japan (46%) are the most likely to want a conventional retirement.

In particular, 75% of U.S. respondents plan to work part time after they have stopped working permanently, seven percent more than the global average.  Specifically, 32% plan to work between five and 20 hours per week in "retirement", and seven percent plan to work more than 20 hours per week.  

Matt Brady, Head of Wealth Advisory, Americas at Barclays Wealth says: "This represents a step change for wealthy people. While previous generations looked to create their wealth early on in life with a view to enjoying it when they retired, this report reflects a different attitude, with people wanting to continue to challenge themselves well beyond the traditional retirement age. Indeed, many Nevertirees prefer to be actively engaged and challenged and are not bound by their age with regards to continuing their working life."

While the majority of wealthy expect retirement will mean being involved in some type of work, attitudes are also shifting in terms of when to retire.   For 63% of U.S. wealthy, "simply reaching the normal age to retire" is not at all important in determining when they stop working.

High Net Worth Individuals Not Completely Confident in Retirement Funding

The past few years in particular have demonstrated that life is unpredictable, and with unpredictability comes a level of uncertainty surrounding the topic of retirement.  Even among the country's most affluent, the report reveals lingering doubt about financial preparedness for that phase of life.  Comprehending, let alone raising, the amount of money needed to fund 30 years of retirement can be challenging.  

Reflective of this notion is the finding that only 40% of U.S. high net worth individuals "completely agree" that they are "totally confident" in having enough money for retirement, with another 37% "slightly agreeing".  Only 48% of U.S. high net worth individuals would completely classify themselves as financially secure.  

When planning for retirement 35% of U.S. wealthy feel that the rate of tax they have to pay is predictable, compared to 58% of Latin American high net worth individuals and 73% of wealthy individuals in Switzerland.

Further, one in ten of the wealthiest surveyed do not agree that they have enough money for retirement (greater than $15m in investable assets). Among the global wealthy who are already retired, only 51% agree they are completely confident in having enough money for their retirement.  

Brady continues, "Unpredictability is a real concern for those in, and looking toward, retirement, and the steady rise of life expectancy, combined with inability to predict investment returns, can be daunting.  Even if most people plan to continue to work in some form, investing during the later years of life remains very important.  For many, income from work will be reduced and investment income, if any, will have to be used to meet the shortfall, to act as a safety net and to enable wealth transfer to subsequent generations."

Retirement: Dream vs. Reality

While the majority of survey respondents plan to keep working in their "retirement" years, there remains a group of wealthy individuals who are either already enjoying a conventional retirement, or planning to do so.  However, for some, the reality of retirement can turn out differently than what they envisioned.   The report identified disparities between how many wealthy individuals believe they will spend their retirement time, and how those who are retired actually do spend their time.  

Of perhaps most significance, the share of people wanting to keep working part time increases as people approach retirement age, and wealthy individuals do manage to translate this aspiration into reality, with a full 40% of wealthy individuals over 65 (globally) reporting that they are working part time.

About Barclays Wealth

Barclays Wealth is a leading global wealth manager, and the U.K.'s largest, with total client assets of $232bn (153.5bn pounds Sterling), as of June 30, 2010. With offices in over 20 countries, Barclays Wealth focuses on private and intermediary clients worldwide, providing international and private banking, investment management, fiduciary services and brokerage.

Barclays Group is a major global financial services provider engaged in retail and commercial banking, credit cards, corporate banking, investment banking, wealth management and investment management services with an extensive international presence in Europe, the Americas, Africa and Asia.

For further information about Barclays Wealth, please visit our website www.barclayswealthamericas.com.

Twitter page: www.twitter.com/barclayswealth

Barclays Wealth is the wealth management division of Barclays Bank PLC, functioning through Barclays Capital Inc. in the United States. Barclays Capital Inc., an affiliate of Barclays Bank PLC, is a U.S. registered broker-dealer and regulated by the Securities & Exchange Commission. Member SIPC.

About this report

Researched by Ledbury Research and written in conjunction with Barclays Wealth, Insights looks at the changing attitudes towards retirement and succession planning amongst the global high net worth community.

Ledbury surveyed over 2,000 high net worth individuals, all of whom had over $1.5m/1m pounds (or equivalent) in investable assets, 200 had more than $15m/10m pounds.  Respondents came from 20 countries across Europe, North America, South America, Middle East and Asia Pacific. The interviews took place during the first half of 2010.

Ledbury Research also conducted interviews with academics, entrepreneurs and other experts around the world. Our thanks are due to the interviewees for their time and insight.

SOURCE Barclays Wealth