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We are living longer but our money isn't

No one has enough money to hold them through retirement, not even if they have retirement savings.

A white paper from financial advisory firm TIAA shows that there aren’t enough workplace retirement plans and even for those that do have one, Americans aren’t saving enough. Many plans don’t guarantee that retirees will make it through retirement without going broke.

The white paper says there are a few different issues that an employee could face when it comes to workplace retirement options:

  • Coverage Gap — Not enough Americans have access to a workplace retirement plan;
  • Savings Gap — Even if they have access to a retirement plan, many Americans aren’t saving enough; and
  • Guarantee Gap — Few plans provide resources such as annuities to guarantee savings will last throughout retirement.

While coverage and savings are getting attention, the “guarantee gap” is problematic. Americans are living longer than ever, but aren’t promised that their retirement money will last them until they die.

“No single policy change will fix the guarantee gap,” TIAA says. “But, important improvements are needed to broaden access to guaranteed income in retirement, beginning with the widespread offering of in-plan annuities in retirement savings plans, which can provide a secure source of income.”

TIAA says that the guarantee gap undermines the whole concept of a retirement plan. It’s true: the purpose of a retirement plan is to help you live out your golden years without going broke. Because plans don’t help employees survive their later years financially, there is less value placed in workplace retirement plans.

“As bipartisan efforts to address America’s retirement crisis continue, policymakers, employers, and employees cannot afford to only address the coverage and savings gaps,” TIAA says. “Restoring the role of annuities in retirement savings plans can empower Americans to protect against outliving their savings.”

Is having a retirement savings worth it?

Considering that more Americans are investing in vacations over retirement, it doesn’t seem like people care about retirement like they should be.

But the world is running out of retirement money, so there really isn’t anyone who should care more about our retirement than us. Sadly, we don’t care about it as much as we say we do. Ultimately, we are so stressed about our retirement years that it’s literally making us sick.

Sadly, we aren’t exactly equipped to taking our retirement savings into our own hands. We tend to forget about it. A third of Americans are leaving their retirement plans behind when they leave their jobs. It’s even higher — 43 percent — among Gen Xers. Leaving them behind keeps workers from having that much more money when they entire retirement, meaning they could still be working long into “retirement.”

Retirement might be the most out of reach for millennials, who tend to be confused about financial terms and practices. This comes from their parents, who didn’t know basic money matters themselves to teach their children.

It’s a lot for individuals to take on their retirement plans, so it’s good when companies make it a priority to help employees with their retirement futures. One study shows that companies that track and help employees with their retirement planning make workers more prepared and financially comfortable in their golden years.

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Meet the Author

Dori Zinn

Dori Zinn


Zinn is a freelance journalist based in Fort Lauderdale, Florida.

Budgeting & Saving, Retirement

401k, IRA

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