Ferguson frames viable options for the national retirement dilemma

Some of the disruptive demographics and trends around people’s “retireability” — and potential solutions — were summarized by Roger Ferguson, TIAA-CREF’s president and CEO, on the closing day of a conference for institutional plan sponsors on Fri., April 15.

Over the next two decades, 80 million Baby Boomers will reach the traditional retirement age of 65. With greater longevity, many will need to fund a retirement that could stretch for 20 or more years.

In summarizing discussion throughout the conference, Ferguson observed that Boomers fear running out of money and losing their identity associated with work. They also have very different needs around retirement and aging than their parents’ generation did.

Many will want to keep working well past the standard retirement age. Many will want to reinvent themselves — returning to the classroom or starting businesses. Women will continue to have increasing influence on lifestyle choices, and ethnic minorities will continue to grow, making America a much more diverse society. But the recent economic crisis has only intensified Boomers’ concerns and lowered their confidence in their ability to retire comfortably.

In response to the retirement dilemma, Ferguson said the “nation needs a 21st century retirement system.” Such a system would:

  • Continue to recognize that helping employees achieve financial security during retirement is a shared responsibility of government, employers and employees.
  • Provide income that can last a lifetime.
  • Help retirees meet their uninsured health care expenses, which loom as a large financial burden as people live longer and cope with chronic illnesses.
  • Recognize that a "one-size-fits-all" approach won't work, given the variety of demographic and other trends at play.
  • Include targeted approaches for women, ethnic minorities, different age groups, different income groups, and people with multigenerational caregiving responsibilities.
  • Be sustainable, regardless of generational population shifts.

TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.

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