INSIGHTS
by Nancy Tigner, Senior Vice President, Client Services When it comes to thinking about saving for retirement, most of us can think of 10 other tasks to focus on. According to recent studies, so many people are procrastinating about saving that nearly 28 million U.S. households do not own a retirement savings account of any kind. Only 11% of all Americans have retirement savings of $250,000 or more. Why do people wait? For many, the amount of information available is simply overwhelming. Bombarded by Web sites, advertising, mailings and phone calls, Americans are confused about even the most basic saving vehicles. Thousands of questions come into TIAA-CREF every day like: how much should I save each month; how do you pick an IRA; what is an education savings account; how much will I need for health care? These are all important questions. To make it easier to sort through the information, we've come up with five tips for getting started. 1. Calculate What You'll Need It is never too early to start thinking about retirement. For those in their 20s starting their first job, it may seem like a long way off but the earlier you start planning for your retirement, the longer your savings has to grow. And for those for whom retirement is imminent, NOW is the time to get a handle on how much you'll need to live and make any investments or adjustments to your retirement plan. Some questions to ask yourself are: Do I have enough to retire? Is my asset allocation correct for me? How can I manage escalating health care costs in the event of catastrophic illness, care for an elderly parent or finance a child's education? Answers to these and other questions will help you determine how much you should save, as well as help you choose the appropriate investment vehicle(s). 2. Track Your Social Security Benefits Currently, Social Security pays the average retiree about 40% of preretirement earnings. This money is paid out in the form of monthly benefits either at retirement or when someone is severely disabled. In case of a spouse's death, survivors may be eligible for benefits. In addition, spouses may be eligible for Social Security benefits through a spouse's job and can receive benefits when they retire or if they become disabled or die. To calculate a benefit estimate, and for more information, visit the Social Security Administration's Web site (www.ssa.gov). 3. Take Advantage of Plans Offered by Employers Social Security should only be a part of a retirement savings strategy. It is just as important to find out what pension or retirement savings plans your employer offers and how much employees can contribute. Most experts say you'll need 70 to 80 percent of your pre-retirement income after you stop working. If you are not already, take full advantage of any saving programs your employer offers, if you're not, you are wasting an opportunity to build a strong and lasting retirement foundation. 4. Explore Your Options A strong financial plan should encompass a 'holistic' approach, that is, in addition to Social Security and retirement plans like IRAs or annuities, you should include financial wealth products like stocks and bonds, home equity, business interests, etc. A proper mix and diverse portfolio of investments held over a long period of time can help you achieve your retirement saving goals. 5. Don't touch your retirement savings Over the course of decades, you may find it necessary to dip into your retirement savings to buy your first house, pay for a child's education or pay expenses if you lose your job or are disabled. Life happens. But look at all your options before you take money out of your retirement accounts, you'll lose principal and interest, and you could pay substantial penalties. Produced by TIAA-CREF Media Relations Contact: 212 916-4993 or visit www.tiaa-cref.org/about/press
TIAA-CREF Individual & Institutional Services, LLC., and Teachers Personal Investors
Services, Inc., distribute securities products. You should consider the investment
objectives, risks, charges and expenses carefully before investing. Please call
TIAA (Teachers Insurance and Annuity Association), New York, NY and TIAA-CREF Life Insurance Co., New York, NY issue insurance and annuities. TIAA-CREF Trust Company, FSB provides trust services. Investment products are not FDIC insured, may lose value and are not bank guaranteed. TIAA-CREF Tuition Financing, Inc. (TFI) is the 529 college savings plan manager.
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