NEW YORK, March 9, 2022 – TIAA is increasing interest rates on its TIAA Traditional offering by an average of 21%, boosting the retirement security of more than 2 million savers who are accumulating in the company’s flagship fixed annuity.
Through this latest increase, TIAA will share $2.3 billion of interest on top of the $5 billion of interest it has already guaranteed, bringing the total amount credited to Traditional investors to well over $7 billion this year. This increase comes just weeks after TIAA increased lifetime income payouts to annuitants.i All told, TIAA has paid more lifetime income than any other insurer – almost 60% more.ii“
Helping Americans have a dignified and secure retirement is in our DNA,” said Colbert Narcisse, chief product and business development officer at TIAA. “Our unique, mission-based ownership structure has allowed us to return profits to our clients and provide superior retirement outcomes for more than 100 years.”
TIAA Traditional has paid more in lifetime income than its contractually guaranteed minimum amounts every year since 1949, providing clients who choose to annuitize with a solid foundation of steady, guaranteed lifetime income payments regardless of market conditions.iii TIAA has paid out over a half a trillion dollars in retirement benefits since its founding, never once missing a payment through depressions, world wars, financial crises and pandemics.
“The recent stomach-turning volatility in the market has highlighted one of the very important benefits of TIAA Traditional,” said Bill Griesser, head of Institutional Managed Solutions at TIAA. “Working in a portfolio, TIAA Traditional can provide real-world differences by offering reduced volatility, stable returns without sacrificing performance, as well as guaranteed income you can never outlive.”
TIAA Traditional is different from other fixed annuities. It offers:
- Guaranteed Growth and Incomeiv: TIAA Traditional provides guaranteed growth during the working years people pay into it, which means the value of money contributed is guaranteed to increase every day – even in the most volatile markets. It also provides guaranteed lifetime income by providing the opportunity to turn savings into regular monthly income to help meet everyday living expenses in retirement. It’s like getting a “paycheck”v for life when you stop working.
- Additional Amounts: Along with providing a guaranteed fixed rate, TIAA Traditional offers the opportunity to receive extra interest and income, declared annually at the discretion of the company’s board. As noted above, TIAA has consistently paid additional amounts for over 70 consecutive years.
- Loyalty Bonus: TIAA Traditional also offers a unique opportunity for more growth and income for long-term contributors – a loyalty bonus that rewards savers with additional amounts of income based on how long they have been investing.vi Contributing to TIAA Traditional consistently over a working career can significantly increase payments at retirement, with an average lifetime income advantage of 22.4%.vii
Returning Profits to Clients
TIAA is a private company whose mission is to provide retirement security for educators, healthcare workers, researchers, government employees and others in service. This unique structure and heritage enables a pure focus on serving its plan clients and their employee participants.
TIAA can increase rates due to its disciplined approach to managing the TIAA General Account, which backs TIAA Traditional and invests in a broadly diversified portfolio that enables long-term returns.
TIAA is a leading provider of secure retirements and outcome-focused investment solutions to millions of people and thousands of institutions. It is the #1 not-for-profit retirement market providerviii, paid more than $3.6 billion to retired clients in 2020 and has nearly $1.4 trillion in assets under management (as of 12/31/2021).ix For more information, visit tiaa.org.