How old is old? A majority of people who have investable assets greater than $250,000 told UBS Wealth Management Americas that old is at least age 80 -- 20 years beyond age 60, when previous generations considered themselves over the hill.
How do you know you are old? When you have to give up your independence. Here are the new benchmarks offered by UBS respondents. You will know you are old when:
- You can't live in your own home (71 percent).
- You have to surrender the car keys (67 percent).
- You grow forgetful (45 percent).
- You develop a serious health problem (37 percent).
- You get a little hard of hearing (26 percent).
- You retire (16 percent).
UBS respondents almost unanimously divided their retirement years into three categories:
- An early retirement phase where they work part time, volunteer or segue into a new encore venture.
- Mid-retirement years, dubbed "my time," when people think they'll work less and play more, spending time on travel and hobbies.
- Late retirement, "the last waltz," when people think they'll stay home and rest more.
How does this new view of aging affect retirement planning? "It complicates it," says Emily Pachuta, executive director of UBS Wealth Management Americas. "People want these decades to be active and meaningful. There's no more 'Grandpa broke his hip and it is all downhill from here.' It is a more complex planning scenario because of the different income needs with each stage."
Despite evidence to the contrary, respondents in this well-heeled segment of the population are confident they will be able to live well on significantly less income than they earned during their working years. On average, respondents estimated that they will need only 60 percent of the amount they previously made to be comfortable. The traditional financial industry advice is that retirees require about 80 percent of pre-retirement income.
Pachuta is skeptical that conservative estimates will be accurate. "Maintaining quality of life is critical for people as they age, and to maintain quality of life requires money," she says. "People are seriously underestimating how much they will need."
She advises those who think they'll live a long, active and multi-stage retirement to plan accordingly; otherwise, they could come up short with more life than money.