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Step 4: Learn how to create a plan that includes income you can’t outlive
With people living longer, retirement is lasting longer—30 years or more for many. So your income plan should last as long as you do.
The benefits
It starts with a solid foundation
Lifetime income sources such as Social Security, pensions and fixed annuities can help you create a foundation—or an “income floor”—designed to help cover everyday expenses throughout your retirement. These changes are not affected by changes in the market.
Guaranteed lifetime income from fixed annuities is subject to the claims-paying ability of the issuing company.
Social Security
To maximize monthly benefits from the government, consider starting your claim at full retirement age or later. Spouses should plan together to make the most of spousal benefits.
Pensions
Today fewer than 20% of American workers are offered a defined benefit pension like your grandparents may have had.1 If you have one, it should be included in your income plan.
Annuities
A fixed annuity can help bridge gaps you may have when it comes to income needed to cover everyday expenses. You can choose when and how much of savings to convert to a lifetime income.
By the numbers
79% of Americans say having a guarantee of monthly income for the rest of their life is important to them
Source: 2016 TIAA Lifetime Income Survey
What is an annuity?
An annuity can be a cornerstone of retirement
An annuity is a product offered by an insurance company that is designed for retirement and other long-term goals. Annuities can provide you with:
Choice
Annuities offer several income options to help meet your personal needs.
Confidence
If you choose lifetime income, you won't have to worry about running out of money.
Flexibility
Having income you can't outlive allows greater flexibility for the remainder of your investment portfolio to potentially meet unforeseen needs.
Transcript
View From the Top
My image in retiring was I want to retire in the woods and I bought this piece of land. It's a very special place to live. I just love it.
I fell right in my back yard on a piece of uneven pavement and fractured my left shoulder in three places. So now I need somebody to dress me, to make my food because it's hard to cook with one hand.
There were various caregiver places in Lexington, and they sent me Sylvia and she is fantastic.
I am very fortunate because I got involved with TIAA and I have enough money to pay her. If I didn't have that money, I would be at the mercy of friends and relatives.
Even with this reducing it doesn't threaten my total income.
Income options
Your income, your choices
Annuities can provide a wide range of flexible income options and, depending on the type of annuity, your income can be fixed or variable. Your initial income amount is based, in part, on which options you choose.
Your Income Options
- Can be set up for just you or you and a partner.
- Income can be for life or a set period of time.
- Income may be accessible in other ways such as systematic withdrawals depending on your contract.
- Income tax will be due at the time income or withdrawals are taken, plus a possible federal 10% penalty if you make a withdrawal before age 59½.
- Once you set up lifetime or period certain income, that balance is not available for income under other distribution options.
- You cannot change the annuity option or annuity partner once you begin receiving income.
- Features can be added to allow income to continue to beneficiaries for a specified period; adding this benefit will reduce the initial income amount.
Fixed vs. Variable Annuities
- Fixed annuity income is consistent, reliable and guaranteed. For a fixed annuity, the insurance company, not contract owner, assumes risk.
- Variable annuity income is not guaranteed but has the potential to grow over time. The amount of each payment will fluctuate based on underlying investment performance. You assume the decision-making for the investments.
If you choose to invest in the variable investment products, your money will be subject to the risks inherent in investing in securities, including loss of principal.
Stay flexible
You can tailor your plan to suit your needs
Annuity strategies are not one-size-fits-all. Discover how taking income from annuities can be flexible to meet your needs.
A closer look
Our Retirement Annuities
Learn more about the TIAA and CREF annuities that may be offered in your employer savings plan. Contact your institution to see which of these products are available in your plan.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF).
TIAA Traditional
Our flagship fixed annuity can provide lifetime income that has the potential for increases that may help offset inflation.2
Variable Annuities (including the CREF Accounts, TIAA Real Estate and TIAA Access Annuities)
Our variable annuities can help you plan for lifetime income with growth potential, with income that may vary based on the performance of the investment choices you select.
Next Steps
How TIAA can help
Learn more
Explore our Resources that provide more in-depth content on key retirement topics.
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Annuity contracts contain exclusions, limitations, reductions of benefits and may contain terms for keeping them in force. We can provide you with costs and complete details.
The TIAA Traditional Annuity Retirement Annuity (RA) contract form series 1000.24; Group Retirement Annuity (GRA) certificate form series G-1000.4 or G-1000.5/G1000.6 or G1000.7 (not available in all states); Supplemental Retirement Annuity (SRA) contract form series 1200.8; Group Supplemental Retirement Annuity (GSRA) certificate form series G1250.1; Retirement Choice (RC) contract form series IGRS-01-84-ACC; Retirement Choice certificate series IGRS-CERT2-84-ACC; Retirement Choice Plus contract form series IGRSP-01-84-ACC; Retirement Choice Plus certificate series IGRSP-CERT2-84-ACC; Group Annuity (GA) contract form series 6008.8 and 6008.9-ACC; After-Tax Retirement Annuity (ATRA) contract form series 1000.24-ATRA; IRA contract form series 1280.2, 1280.4 (not available in all states and generally no longer issued), or TIAA-IRA-01 and Roth IRA contract form series 1280.3 or 1280.5 (not available in all states and generally no longer issued), or TIAA-Roth-01; and Keogh certificate form series G1350 (not available in all states) are issued by Teachers Insurance and Annuity Association of America, 730 Third Avenue, New York, NY 10017.
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