- Only 31% had a retirement plan.
- 47% consistently saved at least some of their pay.
- Lacks financial knowledge, eg only 23% knowing exactly what to do if they were given a lump sum for investments.
- The higher the income, the likely to have a formal retirement plan.
- 61% said they would pledge some of their assets to buy insurance.
The lack of any formal retirement plan is consistent with my observations. In fact, many of those who approached me for retirement plan only realize the importance when it is already too late. I have to turn away such individuals because a financial planner cannot perform magic for a “disease that is already incurable”.
However, I disagree that the higher the income, the likely to have a formal retirement plan. I have seen higher income earners who do not even save. Not too long ago, I met one individual who earned $10,000 a month but spend everything away. When I gave her the cash flow statement to fill up, she had no idea how she spend it!
The part of the survey which mentioned about pledging one’s assets to buy insurance refers to the private banking sector in which high networth clients can borrow money to buy more insurance using assets or insurance itself as a collateral. It does not apply to mere mortals. This is not the only strange things high networth does. Recently, a wealthy couple in India decided to leave all their wealth to a monkey. (But I must admit that as a professional financial planner, I am one of those who help facilitate such strange decisions. I have done some trusts which were setup by childless individuals on behalf of animal charities).
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