Retirement crisis: 3 critical gaps that could bankrupt you

TIAA Chief Administrative Officer Derek Ferguson unveils the stark reality of America's retirement crisis. Discover why 40% of Americans are running out of money in retirement and learn the critical steps you need to take now to avoid becoming part of this alarming statistic. He breaks down the three major gaps in retirement planning and offers invaluable insights on how to secure your financial future.

Ferguson shares his solutions on “Financial Freestyle with Ross Mac.” Watch the full episode or listen here or wherever you get your podcasts.

This post was written by Jimi Corpuz

Video Transcript

It's amazing that, you know, sitting here right now, 2024 still, 40% of all Americans run out of money in retirement, right?

53% of African American households run out of money in retirement.

So we are looking at a system, if that system is broken, everything breaks down.

So, if your parents, you know, can't run out of money in retirement and you have to start funding them because they don't have money.

So that's taking money out of, out of what should be your, uh, you know, your nest egg, which you should be passing on to your kids.

So, it's just a generational deficit if we can't retire the right way.

So that's the, you know, that's like the problem we're facing.

But if you break it down, there's a, there's a lot of stats that were kind of staggering.

40% a lot of gonna be 40%.

So, again, 40% of people retire without enough money.

Um, you know, you have 40% of young people, uh, 25 to 35 do not contribute to an employer plan, right.

40% of African American households, only 40% of African American households uh contribute to a plan versus 63% of, of white households.

So the these deficits are gonna lead to a definite gap in how people retire, which is gonna impact everything about that person.

So there's really three gaps that we think about.

We think about the access gap.

So who has access to plans?

57 million Americans do not have access to an employer plan, right?

The access gap, the savings gap.

So even when you have a plan, like, you know, first thing I tell my kids whatever job you get join the retirement plan, the 41 K plan immediately, many people don't join.

So in terms of the savings plan, we want people to actually join and then escalate how much money they away because something you talk about a lot, the earlier you start, the more you get the compounding of that money, right?

So if you wait, you can wait if you want because I, well, I can't really afford it.

You can always afford to put this money away.

It's the best investment you're gonna make ever hands down, right?

Because it's tax deferred, et cetera.

And then the last uh the, the um the last gap um is the guarantee gap.

So, and this is that guaranteed lifetime income.