Wealthy investors say financial planning must include long-term care and support for other family members

According to a new study by UBS the majority of investors define wealth as having no financial constraints on what they do. But when asked to assign a dollar amount to being wealthy, respondents said it takes $5 million. The security that comes with cash also plays a critical role, with many holding 20% in cash on average over the past three years. It appears that having a large cash cushion allows investors to be more aggressive with their other investments. 

One of the most surprising findings is that four out of five investors are providing financial support for adult children or aging parents. And one in five is sharing a home with those adults. This has a real impact on the definition of a comprehensive financial plan. The top two personal concerns for investors are long-term care and the financial situation of children and grandchildren.

Comprehensive financial planning must include long-term care and financial support across generations

Financial planning has a positive impact on investors’ confidence in achieving their goals. However, not all financial plans are created equal, and most plans do not increase investors’ confidence as much as one might expect—because they contain major gaps.

Investors’ two top personal finance concerns are long-term care and the finances of their children and grandchildren. Yet investors do not feel adequately prepared regarding these issues and, in most cases, have not addressed these topics through their financial plans. Investors feel highly prepared in most key planning areas—for example, 62% feel highly prepared in their retirement planning, and only 2% are not prepared. However, for long-term care planning, only 33% are highly prepared, and 36% are not prepared.

Most investors have not built their financial support for their extended family into their financial plans but believe they should. For example, 41% have built support for their adult children into their financial planning, but 57% believe they should.

Investors with no financial plan are least confident about achieving their goals. Investors using a written set of financial projections are more confident, but not by much. However, an impressive 85% of investors with truly comprehensive planning that accounts for long-term care and intergenerational finances feel extremely/very confident in achieving their goals.

Do you have a financial plan that includes long-term care and support for family members?


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