Wealthy share concerns of middle class

NEW YORK – Wealthy Americans, it seems, have many of the same concerns as middle class Americans.

A survey released Tuesday by U.S. Trust Corp., a wealth management firm owned by the Charles Schwab Corp., found that the affluent are most worried about whether their kids will have a tougher life financially than they do. Their second biggest concern is terrorism – which was No. 1 last year – and their third fear is the steep increase in educational costs.

Among those looking toward retirement, some 57 percent of the affluent Americans who were surveyed said they plan to work part-time in retirement, and 26 percent hope to start a business. Other studies have found that many middle class Americans will work in retirement, either because they want to or because they have to.

It’s not surprising that the wealthy and not-so-wealthy would have similar concerns and goals, said Paul K. Napoli, executive vice president and head of personal wealth management for U.S. Trust in New York.

“These people are basically self-made,” Napoli said of the affluent. “They grew up in the middle class, worked hard and were successful. So they do have many of the same feelings about their kids and the next generation of our society as a whole.”

But the wealthy – in this case, individuals with taxable income of more than $300,000 a year or a net worth greater than $5.9 million – also have money concerns that the middle class may not share.

For example, the survey showed a decrease in optimism about the stock market, the first decline in four years.

And, Napoli pointed out, that shows up in their investment choices.

In the high-flying stock market of the 1990s, the wealthy kept about two-thirds of their money in stocks. After the tech bust that led to the market declines in early 2000, they became more wary of equities.

The latest survey indicates that domestic stocks represent just 36 percent of their investments, while 17 percent is in cash or other very liquid holdings and 19 percent is in bonds.

“We think it’s time to clear away the emotion of the period we’ve been through and realize there’s a lot of good going on economically … and that it’s a good time to invest in domestic and international stocks,” Napoli said.

The wealthy also expect that only 7 percent of their retirement income will come from Social Security benefit checks, but they back Social Security reform.