Forward Focus

Insights for our times

Roger W. Ferguson, Jr., President and CEO of TIAA, reflects on leadership lessons learned in earlier crises, considerations for navigating our current challenging times—and what to think about as we look toward the future.

Forward Focus - Financial literacy strengthens resiliency

Episode 9

View From the Top

Forward Focus Episode 9: Financial literacy strengthens resiliency

Hi, I'm Roger Ferguson. I'm retiring soon from my role as President and CEO of TIAA. Therefore, this is my last opportunity to speak to you as part of this series. And I want to focus on something very important to me, and I hope to you, financial literacy.

Financial literacy is a passion of mine, because it's so important to building equity among all individuals in our capitalist society.

Low levels of financial literacy can leave people ill-equipped to face a financial crisis, and is associated with lower levels of financial security and financial wellness.

Notably, employees with a higher degree of financial literacy spend less time away from work focused on money issues, around one hour per week, versus about six hours per week for employees who have a lower level of financial literacy. People with higher financial literacy also are much more likely to save and plan for a secure retirement.

The TIAA Institute, working with researchers at George Washington University, recently found disturbingly low levels of financial literacy among women, and also lower levels among young folks.

Through a series of questions used to track financial literacy over time, these researchers found that on average, women got less than half, about 49%, of the questions correct. That compares to an average rate of about 56% correct for men.

Among both men and women, younger generations also did a little worse. For example, people under the age of 45 answered just about 47% of the questions right on average, compared to about 58% for those 45 and above.

Improving financial literacy goes back to the most important lessons in personal finance. If you have children, talk to them about the basics of saving and investing at the dinner table. Early and often might be a good mantra here. Teach them how to use credit wisely, how to avoid the dangers of debt, and most importantly, how to save for long-term goals and objectives. You might be surprised at how interested children and even adults are in things such as the magic of compound interest and the value of dollar-cost averaging in your investment and saving portfolio.

At TIAA, we have made financial literacy and financial education a high priority. For example, our TIAA Bank sponsors Money Matters, that's a program that is expected to reach 10,000 school-age learners at 100 schools by the end of this year. More than 7,000 college students at 12 universities have participated in TIAA's FinSights program, that's a digital financial education program. And we expect to double number by the end of 2022.

It is my hope that more employees, more policymakers, more schools, more adults, more students, everyone... makes financial literacy a higher priority. To provide more Americans with access to the knowledge they need, will certainly help them to build lifelong financial security.

[END]

Sources:

TIAA Institute, Financial literacy and wellness among U.S. women report, November 2020

Roger Ferguson (December 21, 2020), Making Capitalism More Inclusive, LinkedIn.com

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

The views expressed in this material may change in response to changing economic and market conditions.

Investment products may be subject to market and other risk factors. See the applicable product literature or visit TIAA.org for details.

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, Member FINRA, distributes securities products.

©2021 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY 10017

1521379

More videos

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

We strongly recommend that you consult with a financial, tax, or legal advisor before taking any action based on an opinion or other information you obtain from this video series so that all of your personal circumstances can be taken into consideration. The TIAA group of companies does not provide legal or tax advice. Certain products and services may not be available to all entities or persons.

The views expressed in this material may change in response to changing economic and market conditions. Past performance is not indicative of future returns.
 
Any guarantees under annuities issued by TIAA are subject to TIAA’s claims-paying ability.
1521378