Savings and retirement: the needs and expectations of wealthy families

Savings and retirement: the needs and expectations of wealthy families

In France, the richest 20% of French people do a large part of the thrift effort.  (Image credit: Fotolia)

In France, the richest 20% of French people do a large part of the thrift effort. (Image credit: Fotolia)

A study by Cercle de l’Épargne detailing the needs and expectations of wealthy families in terms of investment, wealth management, and retirement.

In France, the richest 20% of French people do a large part of the thrift effort. As mature savers, they are more willing than average to dedicate a portion of their savings to so-called dangerous products. They also believe that their savings should be used to maintain their purchasing power in retirement.

Smart savers

The survey, conducted by Cercle de l’Epargne in early 2022, showed that 92% of respondents with a monthly income of €4,000 or more say they save each year, compared to an average of 70%. Moreover, INSEE highlights the concentration of various assets in the richest 20% of households.

More than 86% of these households own their main dwelling, and about 31% own another dwelling. The richest 10% of them make real estate a preferred investment: rental real estate is on top of the investments that are considered interesting, 77% of them declare this investment as profitable and 58% as low risk (compared to 76% and 49% respectively of French families).

They put life and equity insurance as the second most interesting investment platform.

Attracting an increasing proportion of the French, the stocks attract the most affluent households. Interest in this placement gained 10 points in 7 years for all households. The growth in stock prices in recent years has strongly contributed to this shift in favor of stocks.

Rich people prefer life insurance, 80% of them consider it low risk. At the beginning of 2018, the tenure rate exceeded 60% among the top 10% earners (compared to 40% for the population as a whole).

Only 8% of high-income earners consider Livret A savings account profitable and only 25% consider it interesting to invest in Livret A. After all, 93% of households in the last tenth of income have a passbook (compared to about 67% for the most modest households) due to the high level of security and liquidity.

Finally, wealthy families are reluctant to invest part of their funds in crypto assets. Their age is above average, which explains their low appetite. If Bitcoin is considered profitable by 71% of them (compared to 57% of the total population), it is also viewed as riskier.

Well-to-do families and retirees

63% of monthly incomes greater than or equal to 4000 euros consider that the pension system will go bankrupt within a few years if it is not deeply reformed. On the other hand, they are less critical of the ability of the system to provide a sufficient level of the pension to live comfortably in retirement: almost 60% of them consider the amount of pensions sufficient to live comfortably, which is a completely opposite result of the sentiment expressed by the population as a whole, 66% of whom They consider pensions to be insufficient or will be insufficient to live comfortably in retirement.

However, 46% of those over €4,000 see that savings efforts should fundamentally enable them to improve their standard of living in retirement. This goal is 9 points ahead of precautionary savings. They stand out in this question from the rest of the population, making precautionary savings the main objective of saving.

They are far more than the average saving for retirement: 73% saved to improve their standard of living in retirement (versus 52% on average). They have sufficient means to save regularly for this purpose: 24% do so regularly (compared to 10% of the total population) and 25% do so fairly regularly (compared to 15% of the total population).

The majority (51%) say they are willing to work full time until the age of 65 to benefit from a good retirement with respect to the last salary.

Donation is a unique way to pass on one’s heritage

According to the Savings/Amphitéa survey, 23% of the wealthiest families have already received a large gift and 21% an inheritance (versus 10% and 13%, respectively, of the total population). Half (47%) believe they will leave a significant legacy upon their death (compared to 15% of all respondents). If they do not make conversion a priority savings goal, they are nevertheless in favor of reducing taxes on gifts and inheritances (79% of respondents).

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