TIAA Traditional questions & answers

What is TIAA Traditional Annuity?

As a current or former employee of a non-profit or governmental organization, you (and members of your immediate family), have exclusive access to TIAA Traditional Annuity either through your employer's retirement plan and/or through a TIAA IRA. TIAA Traditional is a guaranteed annuity issued by Teachers Insurance and Annuity Association of America (TIAA) that is designed to be a core component of a diversified retirement savings portfolio. It has helped prepare millions of people like you with a solid foundation for retirement.
Contributing to it gives you the dependability and certainty that you will have a “salary” in retirement that can help cover your basic, everyday living expenses without worrying about outliving your income. In up and down markets, TIAA Traditional preserves the value of your savings. In fact, your balance will grow every day – guaranteed.1
Our unique approach, consistent with TIAA’s overall mission, may reward you with additional amounts of lifetime income the longer you have contributed to TIAA Traditional. You have the flexibility to choose when and how much to convert to lifetime income so you can be certain you (and a spouse or partner you may choose to include) will have income you cannot outlive – a choice that only an annuity can provide. Of course, you don’t have to convert all of your TIAA Traditional savings to lifetime income, but if you can cover your basic living expenses with a TIAA Traditional Annuity you may be able to use your other income sources for discretionary purposes.
Keep in mind that an annuity is an insurance contract that provides guarantees. Like all insurance products, the ability to satisfy guarantees is subject to what’s referred to as the “claims-paying ability” of the insurance company that issues the contract. As such, TIAA Traditional’s guarantees are subject to TIAA’s claims-paying ability and additional amounts of interest or lifetime income, when declared, are not guaranteed for periods other than the period for which it is declared.1,2
TIAA Traditional has two phases. Taken together, they are designed to deliver certainty and income you cannot outlive.
Accumulation Phase
You get competitive interest crediting rates and a guaranteed minimum interest rate when you start putting money into TIAA Traditional. 1 You will never lose money. Part of the guaranteed asset class, TIAA Traditional can help offset the effects of market fluctuations on other assets held in a diversified retirement portfolio.
Retirement Income Phase
Subject to the terms of your employer’s plan, you choose when and how much to convert to lifetime income. You can choose to receive income from TIAA Traditional for the rest of your life. You can also choose options that will continue to pay a spouse or partner if you pass before they do. There’s also the potential for your lifetime income to increase during your retirement years, which may help offset some of the effects of inflation. 1 You can combine lifetime income with other income options, payment frequencies, and payment start dates to meet your retirement income and estate planning needs. For more information, see TIAA’s Income Options video.
What are some benefits of TIAA Traditional?
Allocating some of your savings to TIAA Traditional can add stability to your portfolio, can provide competitive returns over all market cycles, and offer certainty that you can receive an income you can’t outlive. While there is no one-size-fits-all formula for allocating retirement dollars among asset types based on your financial objectives, time frame and tolerance for risk, you may want to maintain a well-diversified portfolio that may also include stocks, bonds, real estate and other investments.
In addition, our mission-based approach can provide you with two distinctive additional potential benefits. Like all insurance companies, we are required to set money aside to protect your benefits. However, unlike most other insurance companies, and consistent with our non-profit heritage, to the extent the reserves we set aside prove to be unneeded, they have been returned to retirees to increase the amount of lifetime income they receive initially and over time.
Can I benefit from using TIAA Traditional long before I’m close to retirement?
Yes. Contributing to TIAA Traditional consistently over your working career, instead of waiting until you are about to retire, could help increase the amount of your lifetime income. 3 This is due, in part, to TIAA’s return of contingency reserves that have built up on older contributions. As such, you may want to consider contributing to TIAA Traditional early and often in order to take advantage of this valuable potential benefit.
I'm fairly close to retirement. Is it too late to begin contributing to TIAA Traditional?
No. TIAA Traditional's guaranteed interest can add stability to your retirement savings portfolio. This feature may be especially important as you approach retirement, a time when unexpected portfolio losses may have a greater negative impact on your desired lifestyle in retirement.
In addition, as noted above, the sooner you start contributing the greater the potential for reserves to build up which may increase your lifetime income.
Is my money safe?
Yes. Your contributions in TIAA Traditional and the interest paid to you are guaranteed by the claims-paying ability of TIAA. We are one of only three insurance groups in the United States to currently hold the highest possible rating from three of the four leading insurance company rating agencies: A.M. Best, Fitch, Moody’s Investors Service and Standard & Poor's. 2
Can I get my money out of TIAA Traditional?
Yes. However, TIAA Traditional is designed primarily to help meet your long-term retirement income needs; it is not a short-term savings vehicle. Therefore, some contracts require that benefits are generally paid in 10 annual or 84 monthly installments and, when lump sums are permitted, impose surrender charges on these withdrawals.
These provisions are designed to allow the TIAA General Account, which backs the guarantees and benefits under TIAA Traditional, to invest in longer-term illiquid assets that often offer enhanced returns versus shorter-term, more liquid assets. 4
Other contracts allow full freedom to withdraw and transfer out of TIAA Traditional but the trade-off for increased access has typically been lower interest crediting rates. 1
TIAA has rewarded participants who save in contracts where benefits are paid in installments over time instead of in an immediate lump sum by crediting higher interest rates, typically 0.50% to 0.75% higher. 1,5 Higher rates may lead to higher account balances and more retirement income for you.
For additional information, please check with one of our advisors at 800-842-2252.
What are my retirement income options?
Change to TIAA Traditional allows you to choose from a range of income options that offer flexibility to meet your unique income needs. Subject to the terms of your employer’s plan you can:
  • Choose when to convert some or all of your TIAA Traditional savings into income that you (or you and your spouse or partner) can’t outlive. This is a benefit that only an annuity can provide.
  • Add a guarantee period so that if you die before the period ends, payments will continue to those you have designated until the end of the guarantee period.
  • Combine lifetime income with other income options, payment frequencies and payment start dates to help meet your retirement income and estate planning needs.
  • Pair guaranteed lifetime income from TIAA Traditional with income from other sources, such as variable investment products that may provide the potential to capture market upside and hedge against inflation.6
 
Designing your personal retirement income strategy starts with three steps: create a plan, think long-term and don’t go it alone. We have specially-trained consultants who can help you understand all of the lifetime (and non-lifetime) income options available to you, the impact on your retirement income and the benefits and drawbacks of each. For more information, visit TIAA’s Preparing For Retirement online experience.
For more TIAA Traditional Information please visit:
TIAA Traditional Annuity is a guaranteed annuity product issued by Teachers Insurance and Annuity Association of America (TIAA), New York, NY.
 
 
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. All guarantees are based on TIAA's claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. Past performance is no guarantee of future results.
 

TIAA Traditional may not be available under all employer-sponsored retirement plans recordkept by TIAA but is available to eligible individuals through a TIAA IRA. The terms of TIAA Traditional differ between contract forms. Some contracts allow for full withdrawals and transfers. Other contracts only permit withdrawals and / or transfers to be paid in multi-year installments and certain withdrawals may be subject to a surrender charge. Review your contract, certificate, or other product literature, or contact TIAA for complete details. When TIAA Traditional Annuity is made available within an employer-sponsored retirement plan, income and withdrawal options are subject to the terms of the employer plan. Withdrawals prior to age 59 1/2 may be subject to a 10% federal tax penalty, in addition to ordinary income tax.
 

1 Interest credited to TIAA Traditional Annuity accumulations includes a guaranteed rate, plus additional amounts as may be established on a year-by-year basis by the TIAA Board of Trustees. The additional amounts, when declared, remain in effect through the "declaration year", which begins each March 1 for accumulating annuities and January 1 for payout annuities. Interest in excess of the guaranteed amount is not guaranteed for periods other than the period for which it is declared. Withdrawals and transfers out will reduce account balances. In addition, under Group Retirement Annuity and Retirement Choice contracts a surrender charge of 2.50% is assessed against withdrawals taken from TIAA Traditional within 120 days after termination of employment.
 
2 For its stability, claims-paying ability and overall financial strength, Teachers Insurance and Annuity Association of America (TIAA) is a member of one of only three insurance groups in the United States to currently hold the highest rating available to U.S. insurers from three of the four leading insurance company rating agencies: A.M. Best (A++ as of 6/18) , Fitch (AAA as of 6/18) and Standard & Poor's (AA+ as of 10/18) , and the second highest possible rating from Moody’s Investors Service (Aa1 as of 9/18) . There is no guarantee that current ratings will be maintained. The financial strength ratings represent a company’s ability to meet policyholders’ obligations and do not apply to variable annuities or any other product or service not fully backed by TIAA’s claims-paying ability. The ratings also do not apply to the safety or the performance of the variable accounts, which will fluctuate in value.
 
3 Source: TIAA Actuarial Department, based on a study that compared the amount of initial lifetime income that would have been received by two hypothetical participants beginning lifetime income, for each of the 265 months from January 1, 1995 through January 1, 2017. The two hypothetical participants are the same age and they select a single life annuity with a 10 year guarantee period using TIAA’s Standard payout annuity. Over the study period, the career contributor’s initial lifetime income exceeded that of the new contributor in 255 of the 265 retirement months. This is due, in part, because of TIAA’s return of contingency reserves that have built up on older contributions.
 
4 Participants do not invest in the TIAA General Account portfolio, which supports the minimum guaranteed returns, additional amounts, and payout obligations under the TIAA Traditional Annuity. The TIAA General Account, which backs the guarantees and benefits of TIAA Traditional, is comprised of long-term, potentially higher yielding investments. Any guarantees under annuities issued by TIAA are subject to TIAA’s claims-paying ability.
 
5 Source: TIAA Actuarial Department.
 
6 Under accounts that are not guaranteed, such as variable investment options, account values will fluctuate based on performance of the accounts and it is possible to lose money in non-guaranteed accounts.
 

TIAA Traditional is a fixed annuity product issued by Teachers Insurance and Annuity Association of America (TIAA), New York, NY. Annuity contracts contain terms for keeping them in force. Exclusions, restrictions, limitations and reductions in benefits will, in certain situations, apply to annuity contracts. Your financial consultant or advisor can provide you with costs and complete details.
 
TIAA Traditional is a fixed annuity product issued through these contracts by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY, 10017:  Form series 1000.24; G-1000.4 or G-1000.5/G1000.6 or G1000.7; 1200.8; G1250.1; IGRS-01-84-ACC and IGRS-02-ACC; IGRS-CERT2-84-ACC and IGRS-CERT3-ACC; IGRSP-01-84-ACC and IGRSP-02-ACC; IGRSP-CERT2-84-ACC and IGRSP-CERT3-ACC; 6008.8 and 6008.9-ACC; 1000.24-ATRA; 1280.2, 1280.4, or 1280.3 or 1280.5, or G1350. Not all contracts are available in all states or currently issued.
 

Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.

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