
(TotalConservative.com) – An increasing number of Americans are living paycheck to paycheck and are not prepared for retirement, according to a chief administration officer of the Teachers Insurance and Annuity Association of America (TIAA).
Derek Ferguson of the TIAA recently appeared on the Yahoo Finance podcast “Financial Freestyle,” hosted by Ross Mac, and warned that a dwindling number of Americans have sufficient retirement savings. The Wharton and Harvard alumnus, now a TIAA chief administration officer, has also worked at the Robin Hood Foundation as an interim CEO.
On “Financial Freestyle,” Ferguson said the picture for future American retirees looks dismal and that the situation impacts certain demographics more than others, such as black Americans, 53% of whom are likely to run out of their retirement savings if they have any at all. According to the TIAA report from January which he cited, almost 40% of Americans across the board will possibly outlive their retirement funds.
Ferguson believes that if this “system is broken,” then “everything breaks down.” He told Mac that the current deficits in retirement savings will certainly “lead to a definite gap in how people retire.” That report showed that 67% of Americans, or two-thirds, currently have “at least some money” saved for retirement, yet almost “one in four don’t know how much they’ve saved.”
Ferguson explained the common cycle of the growing pattern where parents deplete their retirement funds or never had one, and then the children are left funding them, resulting in those children using up their “nest egg” that should be passed down to their own children. The TIAA officer concluded that this cycle results in a “generational deficit.”
In recent years, concerns about depleting retirement funds have risen in America, according to an Allianz survey from April. Consumer Insights vice president at Allianz, Kelly LaVigne, said that it’s a “scary thought” to run out of money while retired and that it was “important” for people to establish a “thorough financial strategy” for that period of their life, which comes sooner for some people than others depending on factors like health.
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