TIAA-CREF Lauds President Obama's Call for Helping Americans Save for a Secure Retirement
New York, January 26, 2010
TIAA-CREF, America’s largest private retirement system, lauds President Obama’s call to make it easier for more Americans to save for a secure retirement.
TIAA-CREF manages retirement savings on behalf of 3.6 million Americans and is the leading retirement system in the academic, research, medical and cultural fields.
"President Obama’s call for expanding long-term savings has the potential to help more Americans build financial security that lasts a lifetime," said Roger W. Ferguson, Jr., TIAA-CREF’s chief executive. "The President’s proposals could make saving easier and enable many workers to start saving earlier, which in our experience enhances retirement security significantly."
The economic shocks of the past 18 months have shown it is time to address serious shortcomings in our nation’s approach to retirement savings. Research from McKinsey & Co. finds that the average American family will face a savings gap of $250,000 at the time of retirement.1 Even with payments from Social Security and pensions, as well as personal savings in 401(k) and other retirement plans, the average family will have only about two-thirds of the income it will need.
TIAA-CREF supports steps to establish a holistic retirement system that helps Americans build lifetime financial security. A holistic system would:
- Ensure full participation and sufficient funding by enrolling employees automatically on their first day of work.
- Provide lifetime income through an affordable annuity option.2
- Offer incentives for employers and employees that encourage total contributions between 10 and 14 percent of pay – about double today’s savings – helping individuals reach a target of replacing 70 percent of their pre-retirement income.
- Help workers manage risk by offering a menu of 15 to 20 investment options to provide sufficient diversification without presenting an overwhelming number of choices.
- Give workers financial education and objective, noncommissioned advice to help them build a portfolio that reflects their goals and risk tolerances.
- Provide opportunities and incentives to save for retirement medical expenses.
TIAA-CREF provides more than $10 billion in retirement income, guaranteed lifetime income3 and other payments to 500,000 participants each year.
"Retirement Expert Urges Diversity in 401(k) Options," USA Today, January 19, 2010
"The News Hub: Crisis Shows Flaws in Retirement System," The Wall Street Journal, December 21, 2009
"It’s Time to Rethink Our Retirement Plans," The Wall Street Journal, November 13, 2008
"Retirement Security, Guaranteed," The Huffington Post, October 1, 2009
Remarks by TIAA-CREF’s Roger Ferguson to the ACLI, October 19, 2009
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with more than $402 billion in combined assets under management (9/30/09) and the leading provider of retirement services in the academic, research, medical and cultural fields.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.
1 "Restoring Americans' Financial Security: A Shared Responsibility," McKinsey & Company, October 19, 2009.
2 Lifetime income is a guarantee subject to the claims-paying ability of the insurance company.
3 Subject to TIAA's claims-paying ability.