TIAA sheds light on ways individuals can position themselves
to plan for a financially secure future
Finding the right support, tools and strategies to shape a
financial plan can feel daunting for many Americans. But putting
those pieces together is critical as individuals work toward a more
secure future.
Fortunately, people at every life stage can tap a number of
resources for help. TIAA’s 2016 surveys revealed three key insights
that, taken together, can help them pursue their goals:
1. Learn How To Get Income for Life
There are significant gaps between Americans’ attitudes and
behavior when it comes to guaranteed monthly income for life in
retirement. Some people are unsure of how much money they will need
in retirement, or which resources can help them meet their monthly
income goals.
In fact, nearly half (49 percent) say their retirement plan’s
No. 1 goal should be providing guaranteed monthly income in
retirement, yet 41 percent are unsure if their current plan offers
such options.1 Understanding and taking full advantage of their
plan features is a key first step toward building savings that can
help them achieve a successful retirement.
Survey respondents also underestimate how much money they will
need when they retire. Sixty-three percent of Americans who aren’t
retired estimate they will need less than 75 percent of their
current income to live comfortably.2 However, most experts
recommend replacing 70 to 100 percent of their current income in
retirement.
“Knowing how much money you’ll need to live comfortably in
retirement—and generating a secure stream of income that you can’t
outlive—should be a top priority for all Americans,” said Kathie
Andrade, CEO of TIAA’s Retail Financial Services business. “Having
a source of guaranteed income can help you be better prepared to
deal with unexpected events as well.”
Guaranteed income options*, such as annuities, are underused.
Only one in 10 Americans has an annuity.3 That portion jumps to 70
percent among TIAA retirees—and of that group, 92 percent are
satisfied with that decision.4 The more people know about
annuities, the more favorable their impressions are.5
2. Don’t Wait To Tap Financial Advice
People can benefit from professional financial advice: 61
percent of those surveyed who have received advice feel confident
about their financial situation, compared to 37 percent of people
who haven’t. But many do not realize it’s within reach: 35 percent
of Americans who have not worked with a professional financial
advisor say they don’t think they have enough money.6 Even more --
49 percent -- believe they need more than $50,000 in savings to
justify meeting with an advisor.7 But there is no minimum amount of
savings required for individuals seeking personal support with
their financial plan.
Notably, some workplace plans offer financial advice at no
additional cost -- a service one-third of Americans would like to
have as an employee benefit.8 In fact, the prospect of financial
advice at no additional cost was the most popular among various
free perks an employer could offer -- more popular than on-site
medical care and free lunch prepared by an on-site chef.9
“Whether you’re just starting your career or beginning to think
about retirement, there are a number of support options available
to help with financial planning,” said Andrade. “Through your
workplace plan, you can take advantage of resources like webinars,
podcasts, and online tools and calculators that make it easier to
plan your future at your convenience.”
3. Lifelong Happiness Starts With a Good Plan
Getting an early start on retirement planning can make a big
difference: Among today’s TIAA retirees, those who began preparing
before age 30 were more likely to retire before age 60.10 The
majority (97 percent) of those early planners who were surveyed say
they are satisfied with their retirement.11
Planning for the future with a spouse or partner also can help
individuals retire with ease: 85 percent who had an easy transition
to retirement shared a common vision with their partner.12
“It’s important to start with an honest dialogue,” said Andrade.
“By planning and having conversations with your partner or spouse
early on, you can align on your financial goals. A shared plan will
help you reach your shared milestones each step of the way.”
In addition to thinking about financial goals, it is useful for
people making the transition to retirement to talk to family and
friends about how they want to spend their time, as well as their
interest in travel and charitable donations. A significant portion
(75 percent) of retirees reported spending most of their time
pursuing personal interests or hobbies while alone, which can be a
significant emotional transition.13 Making a plan in advance can
help drive great outcomes: Indeed, 93 percent of TIAA retirees
surveyed reported being satisfied with their retirement.14
Putting It All Together – With the Workplace Plan
Fortunately, many individuals can look to their employer as a
partner in their retirement planning journey. Many employers are
committed to helping employees achieve their retirement goals --
and have added features some employees may not know about,
including financial education and lifetime income options on their
retirement plan’s investment menu.
“People who leverage many of the benefits a workplace plan
offers may have better outcomes when they are ready to retire,”
said Andrade. “Year-end is the perfect time to get reacquainted
with your plan’s features to make sure you are taking full
advantage in the new year.”
Employees can take advantage of tools and resources to guide
conversations with those close to them and with their employer as
they plan. The Preparing for Retirement experience at TIAA.org, for
example, will help them get into a retirement frame of mind by
helping them evaluate risk tolerance, asset allocation, and the
current status of Social Security and Medicare to help them better
envision their future retirement and the steps they can take to set
themselves up for success.
1 2016 TIAA Lifetime Income Survey2 2016 TIAA Lifetime Income
Survey* Guarantees are subject to the issuing company's
claims-paying ability.3 2016 TIAA Lifetime Income Survey, page 44
2016 TIAA Voices of Experience Survey5 2016 TIAA Lifetime Income
Survey, page 46 2016 TIAA Advice Matters Survey7 2016 TIAA Advice
Matters Survey8 2016 TIAA Advice Matters Survey9 2016 TIAA Advice
Matters Survey10 2016 TIAA Voices of Experience Survey11 2016 TIAA
Voices of Experience Survey12 2016 TIAA Voices of Experience
Survey13 2016 TIAA Voices of Experience Survey14 TIAA Voices of
Experience Survey, page 2
About TIAA
TIAA (TIAA.org) is a unique financial partner. With an
award-winning1 track record for consistent investment performance,
TIAA is the leading provider of financial services in the academic,
research, medical, cultural and government fields. TIAA has $915
billion in assets under management2 (as of 9/30/2016) and offers a
wide range of financial solutions, including investing, banking,
advice and guidance, and retirement services.
1The Thomson Reuters Lipper Large Fund Award is given to the
group with the lowest average decile ranking of three years’
Consistent Return for eligible funds over the three-year period
ended 11/30/12, 11/30/13, 11/30/14 and 11/30/15, respectively. TIAA
was ranked among 36 fund companies in 2012, 48 fund companies in
2013 and 2014, and 37 fund companies in 2015 with at least five
equity, five bond or three mixed-asset portfolios. Classification
averages are calculated with all eligible share classes for each
eligible classification. The calculation periods extend over 36, 60
and 120 months. The highest Lipper Leader for Consistent Return
(Effective Return) value within each eligible classification
determines the fund classification winner over three, five or 10
years. A detailed awards methodology can be found at
excellence.thomsonreuters.com/award/lipper. For current performance
and rankings, please visit the Research and Performance section on
TIAA.org. Past performance does not guarantee future results.
2 Based on assets under management across Nuveen Investments
affiliates and TIAA investment management teams
You should consider the investment objectives, risks, charges
and expenses carefully before investing. Please call 877-518-9161
for current product and fund prospectuses that contain this and
other information. Please read the prospectuses carefully before
investing.
Guarantees are subject to the claims paying ability of the
issuing company.
Investment, insurance and annuity products are not FDIC insured,
are not bank guaranteed, are not deposits, are not insured by any
federal government agency, are not a condition to any banking
service or activity, and may lose value.
TIAA-CREF Individual & Institutional Services, LLC, Teachers
Personal Investors Services, Inc., and Nuveen Securities, LLC,
Members FINRA and SIPC, distribute securities products.
Deposit and lending services and products are provided by TIAA
Direct®, a division of TIAA-CREF Trust Company, FSB. Member FDIC.
Equal Housing Lender.
© 2016 Teachers Insurance and Annuity Association of
America-College Retirement Equities Fund, 730 Third Avenue, New
York, NY 10017
C35663
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161207005707/en/
Press:TIAAElizabeth Anderson, 888-200-4062media@tiaa.org