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 (Dec. 7, 2016) – 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.

About TIAA

TIAA (TIAA.org) is a unique financial partner. With an award-winning15 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 management16 (as of 9/30/2016) and offers a wide range of financial solutions, including investing, banking, advice and guidance, and retirement services.

Press contact


Elizabeth Anderson
888-200-4062
media@tiaa.org
 
* Guarantees are subject to the issuing company's claims-paying ability.
15 The 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.
16 Based on assets under management across Nuveen Investments affiliates and TIAA investment management teams
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