The Greatest Fear of Old Age: UBS Q4 Investor Watch Report Asks Wealthy Investors to Consider ‘Who Will Take Care of Me?’

No parent wants to be a burden, but findings show most are
underprepared

NEW YORK–(BUSINESS WIRE)–UBS
Wealth Management Americas
(WMA) today released its quarterly UBS
Investor Watch
report, “Unassisted
Living
,” revealing that the greatest fear among
wealthy investors as they age is being a burden to children (42%),
trumping fears of surviving on life support (34%) or living in a nursing
home (15%). Though investors prefer not to seek their children’s
assistance, few have discussed their wishes or developed a plan. A mere
39% of investors have talked with children about who will take care of
them in old age. Only half (50%) have factored healthcare costs into
their overall financial plan, and only 23% have saved for their future
care.


These findings are startling in light of recent U.S. Census Bureau data
predicting that the population of Americans aged 65 and older will grow
to greater than 80 million by 2050, and that the number of people likely
to require long-term care is expected to more than double from 12
million today to 27 million over that time span.

In terms of caring for one’s parents, 47% of respondents who currently
provide care described it as a heavy burden, 41% described it as a
moderate burden and 12% said it was a minimal burden.

“Maintaining self reliance is important to the vast majority of
investors,” said
Paula
Polito
, Client Strategy Officer, UBS Wealth Management
Americas. “Having a plan in place for long-term care before they
actually need it will help them avoid burdening their children.”

Stark generational differences in caring for the aged

Only a third of wealthy investors (36%) say that they plan to turn to
family for support or care, with the vast majority (64%) preferring to
solicit outside help. This approach to care stands in stark contrast to
what had been the traditional model, when children – naturally – would
take on responsibility for the care of aging parents. In fact, three
quarters (74%) of wealthy investors say their grandparents relied on
family for long-term care, and more than half (57%) said their parents
did the same.

The majority of wealthy investors (59%) believe caring for aging
relatives is more difficult than it had been in the past. There are
several reasons they believe this:

  • Longer lifespans: 88% of wealthy investors said long-term care
    is harder because people are living longer than ever before. As UBS
    found in the 4Q 2013 Investor Watch report, “80
    is the New 60
    ,” the definition of “old” is changing and people are
    living vibrant lives well into their seventh, eighth and ninth decades.
  • Rising costs of care: 76% said they thought the price of
    modern healthcare is significantly higher than it was for previous
    generations.
  • Geography: Families today are more geographically spread out
    than they used to be, and the majority of wealthy investors (62%) said
    they live more than a couple of hours from where they grew up. The
    same is true for their children – among those who have adult children,
    a third (33%) said none of their children
    lives nearby, while only a third (33%) said that all
    of their children live nearby.
  • Complicated care choices: As a result of advances in modern
    medicine and policy reform, healthcare options have expanded greatly
    over the years, and 65% of respondents said this has complicated the
    choices people have to make.

Staying home and outsourcing care

When it comes to preferences on where they want to live and who should
take care of them, investors prefer to relieve their children of the
responsibility. In terms of housing; 89% would like to stay in their
current home, while 54% consider assisted living an appealing option.
Only 15% consider their child’s home an appealing option, faring
slightly better than the appeal of a nursing home (12%). In terms of
care; 80% of investors want their spouse to care for them and 67% want a
home health aide, while only 27% want a child to care for them.

Covering future healthcare costs is a priority, but not a certainty,
for many

In terms of wealthy investors’ future financial goals, ensuring coverage
against health issues and long-term care needs ranks among their top
priorities (57% say it is important to them), but fewer than half (48%)
say they are confident they will be able to achieve this goal. About
half (49%) said they are “highly concerned” about rising healthcare
costs, making it one of the more distressing macroeconomic issues for
them.

Even for those who have discussed future health and long-term care
decisions, there still is a lot that goes unsaid and unasked between
parents and their children,”
says Sameer Aurora, Head of Client
Strategy for UBS Wealth Management Americas. “It’s a tough
conversation, and no one wants to even think about it, let alone talk
about it, but it’s important to get everyone on the same page before
it’s too late.”

The vast majority of investors are neither planning properly nor seeking
out the proper professional opinions – Investor Watch found that
77% have not set funds aside for future medical expenses, and a mere 8%
have received advice on managing future healthcare costs. Perhaps
because of this, a third of wealthy investors (33%) are worried about
medical / long-term care expenses consuming a significant portion of the
inheritance they plan to leave children. As expected, those with a plan
for long-term care are significantly more confident in their ability to
finance care when needed (71% vs. 27% of those without a strategy).

Women are more likely than men to shoulder the responsibility of care

Though Investor Watch found that the overwhelming majority of
wealthy investors do not want to be a burden to their families in old
age, when they do rely on relatives to fulfill their caregiving needs,
66% say they would rely on a daughter.

This is a role that men and women appear to agree on, with women being
more likely than men to acknowledge that they will be their parents’
primary caretakers (29% of women vs. 19% of men), and men being more
likely to defer the responsibility to their siblings rather than take it
on themselves (26% of men vs. 11% of women). Women say they are willing
to become the primary caregiver because they have a closer relationship
with their parents (52% of women vs. 41% of men), while men more often
say they will take on their parents’ care because they live closer (41%
of men vs. 32% of women) or because they have greater financial
resources (50% of men vs. 32% of women).

We invite you to read the full report here: www.ubs.com/investorwatch

About UBS Investor Watch

UBS
Wealth Management Americas
surveys U.S. investors on a quarterly
basis to keep a pulse on their needs, goals and concerns. After
identifying several emerging trends in the survey data, UBS decided in
2012 to create the UBS Investor Watch to track, analyze and
report the sentiments of affluent and high net worth investors.

Methodology

For this 13th edition of UBS Investor Watch, 1,849
affluent and high-net-worth investors responded to our survey from
September 10 – 18, 2015. These investors have at least $1 million in
investable assets, including 463 with at least $5 million. With 90
survey respondents, we conducted qualitative follow up interviews.

Notes to Editors

About UBS Wealth Management Americas

Wealth Management Americas is one of the leading wealth managers in the
Americas in terms of financial advisor productivity and invested assets.
It provides advice-based solutions and banking services through
financial advisors who deliver a fully integrated set of products and
services specifically designed to address the needs of ultra high net
worth and high net worth individuals and families. It includes the
domestic US and Canadian business as well as the international business
booked in the US.

About UBS

UBS
is committed to providing private, institutional and corporate clients
worldwide, as well as retail
clients in Switzerland
, with superior financial advice and solutions
while generating attractive and sustainable returns for shareholders.
Its strategy centers on its Wealth Management and Wealth Management
Americas businesses and its leading universal bank in Switzerland,
complemented by its Global Asset Management business and its Investment
Bank. These businesses share three key characteristics: they benefit
from a strong competitive position in their targeted markets, are
capital-efficient, and offer a superior structural growth and
profitability outlook. UBS’s strategy builds on the strengths of all of
its businesses and focuses its efforts on areas in which it excels,
while seeking to capitalize on the compelling growth prospects in the
businesses and regions in which it operates. Capital strength is the
foundation of its success.

UBS is present in all major financial centers worldwide. It has offices
in more than 50 countries, with about 35% of its employees working in
the Americas, 36% in Switzerland, 17% in the rest of Europe, the Middle
East and Africa and 12% in Asia Pacific. UBS Group AG employs about
60,000 people around the world. Its shares are listed on the SIX Swiss
Exchange and the New York Stock Exchange (NYSE).

Contacts

Media Inquiries
UBS
New York:
Gregg
Rosenberg, 212-713-8842
Follow us on Twitter: @UBS
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