Even college professors and researchers are worried about how best to finance their retirement years. Many academic employees expressed concern about choosing the best way to draw income from their savings to live on during retirement (67 percent), the possibility of outliving their savings (63 percent), and affording good healthcare in retirement (71 percent), according to a TIAA-CREF Institute survey of 1,002 higher education workers between the ages of 50 and 70 released yesterday.
The majority of college and university faculty members, staff, and administrators (60 percent) say they have consulted with a financial advisor over the past 2 years, the survey found. Their most pressing concerns were about how to invest their savings (89 percent), how much to save for retirement (60 percent), developing a strategy to draw down that savings upon retirement (50 percent), and how to pay for retiree health expenses (28 percent).
A significant portion of the academic employees (41 percent) changed the asset allocation of their retirement accounts this year. Among those making trades, 83 percent decreased their investments in stocks and stock mutual funds. “We don’t know how much of this was an overdue adjustment to long-term asset allocations and how much was an attempt at market timing,” says Dan Keady, director of financial planning at TIAA-CREF. Only about a quarter (24 percent) of the higher education employees changed the amount they are saving for retirement and most of the workers who did make changes managed to save more.
The college professors and administrators also have widely divergent plans for spending their nest egg in retirement. Just over a third (37 percent) of higher education employees say they will withdraw a fixed percentage from their retirement savings each month or year to cover spending. Others aim to convert all or part of their retirement savings into an annuity (25 percent), withdraw only the minimum amount required by law from their retirement accounts each year (29 percent), or don’t know yet (9 percent).