5 Characteristics Wealthy Retirees Have in Common

While retirement dreams vary from person to person, financial security is essential to turn those dreams into a reality. Curiously, among those who enter their golden years with abundant wealth, there are striking similarities in their approach to financial planning and decision-making. 

As approximately 70 million Baby Boomers make their way into and through retirement, increased attention is being given to how they approach retirement spending as well as what constitutes a satisfactory lifestyle in retirement. From early financial planning to the strength of their support networks, affluent retirees’ experiences offer valuable insights that can guide us toward a brighter and more secure future. 

The Latest Figures

In a new report, EBRI.org divided a surveyed group of 2,000 retirees into five groups: average, comfortable, struggling, 'just getting by,' and affluent. The survey only looked at households of retired people aged 62 to 75, and with less than $1 million in assets. 

The study delved into the shared traits among affluent individuals, uncovering significant financial accomplishments that might present challenges for other pre-retirees, depending on various factors like debt and income levels during their working years, intergenerational wealth, and regional living costs across the United States. However, the characteristics exhibited by members of this affluent group align closely with common financial aspirations held by many Americans who dream of a comfortable retirement.

So, what did these affluent individuals achieve, and how can we implement these practices in our own retirement plans? Let's explore these unique traits and discover the path to a fulfilling and financially sound retirement journey. Here’s what you need to know.

1. Early Financial Planning

At the heart of every triumphant retirement narrative lies a meticulously crafted financial plan, and affluent retirees exemplify its efficacy. Their secret? A steadfast commitment to early financial planning. 

The key to the success of these savvy retirees lies in their ability to master the art of saving and investing from a young age. In the realm of retirement savings for Gen X, a notable concentration of funds exists among top earners, on average, the top quartile possesses nearly $250,000, while the bottom quartile holds a comparatively meager $35,000.

What are the successors doing differently? They grasp the power of compound interest and set out to build their financial nest egg as soon as they begin earning. By harnessing the potential of time, they watch their investments grow, oftentimes, exponentially. 

Early financial planning paves the way for subsequent success. Armed with a well-thought-out financial strategy, these individuals embark on their journey toward retirement with unwavering confidence and peace of mind. Freed from financial worries, they pursue new opportunities and embrace change.

2. Diversified Investment Strategies

Wealthy retirees embody the wisdom of diversification in securing their financial future. By spreading their investments across various options like stocks, bonds, and other financial instruments, they help mitigate the risk of market fluctuations. Diversification is crucial to their financial success, enabling them to confidently navigate economic uncertainty and market volatility.

One of its significant advantages is the steady income stream it provides. Through a well-balanced portfolio, they generate multiple income streams, reducing their reliance on a single source of income. This financial independence empowers them to maintain their desired standard of living throughout retirement, irrespective of economic conditions.

By intelligently diversifying and aligning their portfolio with their risk tolerance and financial goals, these seasoned investors strike a delicate balance between risk and reward. This prudent approach safeguards their wealth while allowing them to explore new investment opportunities that align with their evolving financial circumstances. With diversification as their guiding principle, they are better able to fortify their financial security and help ensure a stable and prosperous retirement journey.

3. Frugal Lifestyle

No pre-retiree or retiree like the word “frugal” when it comes to enjoying their golden years. But while the image of wealthy retirees might conjure visions of lavish living and indulgence, the reality often reveals a stark contrast. 

According to the recent Employee Benefit Research Institute Survey, 49 percent of retirees described their current spending behavior as frugal or very frugal.

Surprisingly, many affluent retirees adopt a frugal lifestyle that underpins their long-term financial security. They are well aware of the value of money and the importance of adhering to a budget that aligns with their means.

Instead of succumbing to extravagant temptations, they prioritize their needs over wants. First and foremost, it enables them to preserve their wealth, ensuring that their financial nest egg lasts throughout their golden years. The additional savings from living frugally can be invested wisely, providing a steady stream of income to sustain their desired lifestyle and fund future endeavors. 

By embracing a frugal lifestyle, (or slightly tightening-the-purse-strings), and being mindful of financial decisions, wealthy retirees navigate their retirement years with financial confidence and peace of mind.

Showcasing the empowering effect of disciplined spending - proving that financial well-being is attainable through thoughtful planning - prudent investments, and a mindful approach to money management are all aligned characteristics of wealthy retirees. 

4. Continued Learning and Adaptability

Wealthy retirees possess an insatiable hunger for knowledge and a remarkable willingness to adapt to the ever-changing financial landscape. By staying informed about financial trends, market developments, and investment opportunities, they equip themselves with the tools needed to make informed financial decisions.

But successful investors’ adaptability extends beyond investments; they embrace the exploration of alternative financial avenues and readily diversify their assets to align with long-term goals. This dynamic approach allows them to pivot and adjust their financial course as needed, navigating through turbulent economic waters with unwavering resilience. Moreover, seeking guidance from an experienced and trusted financial advisor can prove greatly beneficial during this journey.

5. Strong Support Network

Wealthy retirees recognize the influential role of a strong support network in achieving their financial goals. At the heart of this network lies the essential partnership with an experienced Wealth Preservation Manager; a vital component of their financial journey. If you seek wealth preservation manager with honesty, integrity and trust to handle your portfolio effectively, look no further than NJM Wealth Preservation Strategies. 

Our seasoned team is dedicated to guiding you on preserving your wealth over the long term, helping to ensure financial security for your (and you family’s) future. By collaborating with our professionals, you can access invaluable wealth management guidance. 

We develop personalized strategies tailored to your unique financial aspirations, ensuring every decision aligns with your goals. With a reliable support network, you can confidently navigate any financial hurdles that may arise, paving the way for a smooth and prosperous retirement experience.

At NJM Wealth Preservation Strategies, we are committed to empowering you with financial confidence through education, direction and continued monitoring of your financial performance. Let us be your partner on this transformative journey toward a secure and prosperous financial future.

Final Thoughts

While wealth may not be top priority in maintaining happiness, these common traits shared by wealthy retirees demonstrate the importance of financial planning, discipline, and adaptability in securing a comfortable retirement. By following these principles, individuals can increase their chances of experiencing a fulfilling and worry-free retirement.

As a trusted Fiduciary advisor, Nic J. McLeod is a second-generation Wealth Preservation Specialist with 20 years of experience. By working with Nic and his talented team, you can have confidence, security, and peace of mind knowing that your financial future is monitored and managed actively and effectively.

Contact us here today to set up your complimentary consultation.