TIAA-CREF Survey Shows Americans Saving Too Little, Yet 37 Percent Plan to Retire Early

Lack of guaranteed income during retirement poses risk of outliving assets

Business Wire


A majority of Americans are saving 10 percent or less of their income during their working years, including many who are saving nothing, yet 37 percent plan to retire before age 65, according to a recent survey by TIAA-CREF, a leading financial services provider. In addition, few respondents have invested in lifetime income solutions that provide the security of monthly payments for the duration of their retirement.

The survey was conducted by an independent research firm and polled a random sample of more than 1,000 adults nationwide on their retirement plans.

One out of five respondents who haven’t retired (21 percent) reported not saving anything for retirement, and 44 percent are saving 10 percent or less of their current annual income, a figure that includes their own savings and any employer contributions. For many survey respondents, this low rate of savings is out of sync with their stated retirement goals. (Most experts agree savings rates should be at least 10 to 15 percent of income annually.)

Additionally, half (53 percent) of survey respondents plan to use withdrawals from their retirement savings as one of their sources of monthly income. Only 21 percent plan to receive retirement income from annuities, which guarantee an income stream for the remainder of the person’s life.1

“Far too many people believe they will be able to live in retirement by just drawing down their savings,” says Teresa Hassara, executive vice president of TIAA-CREF’s Institutional Business. “But as people live longer and healthcare costs increase, this approach leaves people at risk of outliving their savings. Every withdrawal decreases the pool of assets needed to weather down markets, and rising inflation can make it necessary to draw more income than expected.”

The impact can be severe: If retirees make withdrawals from their retirement savings that are equal to the income payments they would receive from a lifetime annuity (assuming the same interest rate), there is a greater than 50 percent chance that the retiree will outlive his or her savings2—whereas the annuity payments continue for as long as the retiree lives.

Ensuring income for life

Survey respondents also underestimated how much money they will need in retirement. One-third (33 percent) of respondents who haven’t retired believe they will need just 25 to 50 percent of pre-retirement income to maintain their current standard of living, and another third (33 percent) believe they will need 50 to 75 percent. This perception is at odds with industry experts’ recommendation, which is that most people will need 70 percent to 90 percent of pre-retirement income to maintain the same standard of living during retirement. Only one-fifth (21 percent) of those surveyed who haven’t retired believe they will need more than 75 percent of pre-retirement income to live comfortably in retirement.

“Retirement security is too important for wishful thinking and guesswork,” Hassara explains. “A more reliable strategy is to guarantee a portion of savings as income you can’t outlive to help cover essentials, like food and housing. Annuity payments create an income stream that lasts for life, even if your retirement stretches for 30 or 40 years.”

By converting a portion of savings into a lifetime annuity, you can have a stream of income guaranteed to last as long as you do.

For more information about the survey, read the executive summary. For more information and tools for retirement planning, visit the TIAA-CREF Advice and Guidance Center.

Survey Methodology

The survey was conducted by KRC Research by phone among a national random sample of 1,017 adults, age 18 years and older, between January 3 and January 5, 2014. The margin of error for the entire sample is plus or minus 3.1 percentage points.


TIAA-CREF ( is a national financial services organization with $564 billion in total assets under management (as of 12/31/2013) and is the leading provider of retirement services in the academic, research, medical and cultural fields.

TIAA-CREF has been providing annuities in retirement plans for nearly 100 years and has the highest average retirement account balances out of 29 companies surveyed.3 TIAA-CREF pays more than $12.3 billion in annuity payments and other disbursements per year to participants. Since 1918 a total of $329 billion in cumulative benefits and dividends have been paid.4

TIAA-CREF has been offering personalized retirement plan financial advice since 2005 at no additional cost to clients of all income brackets and life stages. The company currently offers in-person financial services at more than 65 offices across the country, in addition to phone representatives who are licensed and trained to provide advice. These services provide individuals with a suggested asset class mix and investment recommendations on retirement plan assets, to support their success in reaching their retirement income goals.

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

The material is for informational purposes only and should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results.

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.

Annuity account options are available through contracts issued by TIAA or CREF. These contracts are designed for retirement or other long-term goals and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts [and mutual funds] are not guaranteed and will rise or fall based on investment performance.

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

You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877-518-9161 or log on to for product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing.

© 2014 Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), 730 Third Avenue, New York, NY 10017



1Guaranteed lifetime income is subject to the insurance company’s claims-paying ability.

2Source: TIAA-CREF Institute: TRENDS AND ISSUES (10/06). The payout annuity assumes a 65-year-old retiree, single-life annuity with 10 years guaranteed, 4 percent rate of return, and the mortality assumptions used in computing current total income under TIAA or CREF payout annuities.

3LIMRA, Not-for-Profit Market Survey, first-quarter 2013 results. Based on a survey of 29 companies. Market share ranking does not reflect current investment performance. Average assets per participant are based on full-service business. Please note average retirement account balances are not a measure of performance of TIAA-CREF retirement offerings.

4 As of 12/31/12. Benefits include annuity payments from TIAA and CREF, additional amounts paid on TIAA Traditional above the guaranteed rate, surrender benefits and other withdrawals, death benefits, health insurance and disability insurance benefits, and all other policy proceeds paid.

Chad Peterson, 888-200-4062
Elizabeth Anderson, 888-200-4062
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