Magazine article Black Issues in Higher Education

Risk & Reward: Teleconference Focuses on Retirement Plan Needs of Higher Education Professionals

Magazine article Black Issues in Higher Education

Risk & Reward: Teleconference Focuses on Retirement Plan Needs of Higher Education Professionals

Article excerpt

WASHINGTON -- Whether retirement

is rapidly approaching or

an unimaginable distance down

the career path, higher education professionals

should act quickly and aggressively

to understand and plan for their

post-career financial needs.

What message reverberated throughout

a recent teleconference sponsored by the

Teachers Insurance and Annuity

Association-College Retirement Equities

Fund (TIAA-CREF) and broadcast to more

than 400 sites nationwide via the

Community College Satellite Network.

Experts representing private financial

services firms and public and non-profit

organizations joined TIAA-CREF's

President and Chief Operating Officer

Thomas W. Jones and Assistant Secretary

of the Pension and Welfare Benefits

Administration for the U.S. Department of

Labor Olena Berg in offering basic savings

principles and strategies to more than

21,000 viewers.

"Many people feel they don't have

adequate income to contribute to a retirement

plan," Jones said. "They don't understand

how little they need to put aside. The

potential is quite dramatic if one can save with

discipline and start early."

Since most retirement goals cannot be

achieved through Social Security benefits

alone, planning for retirement requires that

individuals contribute to employer-sponsored

savings plans or individual retirement

accounts, according to Dallas L. Salisbury,

president and CEO of the Employee Benefit

Research Institute and chair of the American

Savings Education Council (ASEC).

Bridging the Gap

During the retirement years, most people

will need between 70 percent and 80 percent

of their pre-retirement income

to maintain their lifestyle, Salisbury said. Yet,

Social Security benefits for the average

middle-income retiree will account for less

than 40 percent of their retirement income.

Employer pension plans will account for

another 20 to 30 percent. The gap must be

bridged through personal savings and

investments.

Contributing 10 percent of salary to a

retirement savings plan could replace 35 percent

to 40 percent of pre-retirement earnings, said

Jones.

Although higher education institutions are

much more likely to sponsor savings plans,

employees must decide for themselves how

much to invest and what level of risk they are

comfortable with in deciding on investment

options, according to Trudy Brown-Clark, a

member benefits consultant with the National

Education Association.

"You need to understand the relationship

between risk and reward," she said. "Risk [in

investing] is unavoidable . …

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