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The head of TIAA said: ‘We could see one of the largest intergenerational transfers of wealth.


For 25 years, we at MarketWatch have made retirement one of our core insurance areas. We’ve tried to help our readers navigate the confusing and often confusing issues surrounding saving, investing, and preparing for the post-career phase of their lives.

On our 25th anniversary, we wanted to ask one of our favorite retirement professionals what she thinks we’ll report in the next 5 years in retirement. As CEO of TIAA, Thasunda Brown Duckett oversees a massive retirement account manager with $1.2 trillion in assets under management. It handles retirement accounts for healthcare systems, colleges, and nonprofits.

Here’s what Duckett had to say:

What big issues will we read in MarketWatch when we retire?

First, in the next 5 years, we will likely see the start of one of the largest intergenerational wealth transfers. It is estimated that after their death, the Silent Generation and Baby Boomers will transfer somewhere between $30 trillion and $68 trillion for their adult children. This will put younger generations in the driver’s seat and has the potential to reshape our economy. Millennials and Gen Z should prepare for this shift in wealth by making sure they’re researching their financial literacy, considering whether they need to see a financial advisor. and think about their long-term investment strategies.

What will the younger generation do when they are in the driver’s seat?

I think we will continue to see younger generations driving the growth in responsible investing, choosing to fill their financial portfolios with companies that align with their beliefs. This will almost certainly become less of a trend and become the “norm” as we see the immediate effects of climate change and as young investors begin to plan for their financial future. their main.

What are the obstacles we’ll be reading about when it comes to young Americans saving for retirement?

Even with the pending shift in wealth between generations, I think we’ll be reading about younger generations facing new headwinds when it comes to saving for retirement. Compared to their parents and grandparents, younger generations have fewer options for saving for retirement. Older workers may already have access to defined benefits (DB) or employer-sponsored pension plans, which help set them up for financial success and provide access to greater access to lifetime income options. Few employers offer these types of plans these days, opting instead for defined contribution (DC) plans, if they are offering a retirement plan. In fact, one-third of Americans today say they have absolutely no access to an employer-sponsored retirement plan.

Despite this considerable approach distance, half Millennials and Gen Z still expect all their retirement income to come from a 401(k) or 403(b) plan. The delta between what the younger generation has access to and where they think their retirement income will come from can have dire consequences in the long run. That’s why we’re working with policymakers and employers to increase access to retirement savings plans, educate workers about income options Lifetime benefits such as annuities and interacting with younger generations to teach them about savings means outside of the employer, like an IRA.

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