Are You Saving Enough for Retirement?
Few issues could be more important for an aging population than whether or not people will be adequately prepared for retirement. This report looks at how much income people need in retirement and then summarizes what economists have concluded about the saving adequacy of today's retirees. The complicated issue of how to think about housing equity, which for many people is their major non-pension asset, is also addressed. A final section focuses on changes in the retirement system - namely, the decline in Social Security benefits relative to pre-retirement earnings scheduled under current law and the impact of the shift from defined benefit to 401(k) plans.(Researcher: Alicia Munnell, Boston College and TIAA-CREF Institute Fellow)
Should Retirees Be Required to Buy Life Annuities?
This TIAA-CREF Institute Policy Brief, the result of a study conducted by the National Academy of Social Insurance (NASI) and supported by a TIAA-CREF Institute grant, examines key questions related to payouts in individual accounts. The issues relate both to personal accounts under Social Security as well as within private retirement plans. The brief reviews financial demographics that are the backdrop for debates about individual accounts and then highlights tradeoffs in three areas of payout policies: retirement withdrawals, spousal rights, and early withdrawals. As lump sums become the typical payout in employer-sponsored plans, the challenge of turning the money into a predictable and secure income for life becomes increasingly important.
(Researcher: Virginia Reno, National Academy of Social Insurance and TIAA-CREF Institute Fellow)
Social Security: Experts Weigh In on Funding Issues and Options
The Social Security system faces some important financing challenges. Fortunately, there are a number of options available to ensure a sound future, as discussed during a March 2005 webcast convened by the TIAA-CREF Institute, American Council on Education, and National Association of College and University Business Officers featuring three TIAA-CREF Institute Fellows. While all three agreed that the funding problem was "challenging, but not insurmountable," they had different views about the value of the president's proposal for voluntary "individual" or "private" accounts. The report summarizes the webcast and focuses on the significance of Social Security, the nature and extent of the funding problem, and options for reform. The impact of certain reform options on higher education is also addressed.
(Researcher: Mimi Lord, TIAA-CREF Institute)
Views from the 2005 NACUBO Endowment Forum - "Reduce risk rather than seek high returns"
Investment managers in attendance at the 2005 forum supported by the TIAA-CREF Institute were happy with the strong equity returns in fiscal 2004, but expressed little hope for a continuation of stellar performance going forward. Pundits said that U.S. equities are hindered by the large federal budget deficit, the large foreign trade deficit, and the low savings rate. U.S. fixed income investment also may come under pressure if the economy transitions into a period of higher inflation. In general, speakers at the forum recommended broad diversification of investments and an overall lowering of risk exposure. Among the asset classes mentioned with above-average prospects: emerging markets and timber.
(Researchers: Robert L. Clark, North Carolina State University and TIAA-CREF Institute Fellow, and Mimi Lord, TIAA-CREF Institute)
Do as I say, not as I do? A look at Directors' ownership in mutual fund industry Directors' ownership is perceived to provide them with an important incentive to monitor the managers of funds they oversee. In addition, directors' ownership is costly, since many directors sit on several fund boards simultaneously. Interesting findings from this research study include: directors tend to hold shares in actively-managed funds; directors' ownership is less prevalent when institutional investors hold many shares of the funds; and directors exhibit some performance chasing in their ownership decisions. There is not much support for the idea that directors have private information, and hold shares when they expect future performance to be high.
(Researchers: Qi Chen, Duke University and TIAA-CREF Institute Fellow: Wei Jiang, Columbia University and TIAA-CREF Institute Fellow; Itay Goldstein, University of Pennsylvania)
Submissions are now being accepted for the TIAA-CREF Paul A. Samuelson Award, which recognizes scholarly writing on issues related to lifelong financial security. Named in honor of the Nobel laureate and former CREF Trustee, this award is given each year in recognition of an outstanding research publication containing ideas that the public and private sectors can use to maintain and improve Americans' financial well being.
The Institute's Knowledge on Demand online library offers recorded web conferences that can be accessed at any time. Recorded events currently available include:
