Three Strategies to Help Consumers Get the Most Out of Their Financial Planning
TIAA sheds light on ways individuals can position themselves to plan
for a financially secure future
NEW YORK–(BUSINESS WIRE)–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 Survey
2 2016
TIAA Lifetime Income Survey
* Guarantees are subject to the
issuing company’s claims-paying ability.
3 2016
TIAA Lifetime Income Survey, page 4
4 2016
TIAA Voices of Experience Survey
5 2016
TIAA Lifetime Income Survey, page 4
6 2016
TIAA Advice Matters Survey
7 2016
TIAA Advice Matters Survey
8 2016
TIAA Advice Matters Survey
9 2016
TIAA Advice Matters Survey
10 2016
TIAA Voices of Experience Survey
11 2016
TIAA Voices of Experience Survey
12 2016
TIAA Voices of Experience Survey
13 2016
TIAA Voices of Experience Survey
14 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
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Press:
TIAA
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media@tiaa.org
