Please Read the Following Information Carefully.
The TIAA Retirement Advisor is a brokerage service provided by TIAA-CREF Individual & Institutional Services®, LLC (“TC Services”), a registered broker/dealer and Member FINRA, SIPC, is intended for use by residents of the United States, Puerto Rico and US Virgin Islands only. TC Services and its parent, Teachers Insurance and Annuity Association of America (“TIAA”), along with their affiliates, are referred to as the “TIAA group of companies” in this document.
TC Services has contracted with an independent financial expert, Morningstar Investment Management, LLC (“Morningstar Investment Management”), a subsidiary of Morningstar, Inc. which has provided an investment methodology that is the basis for the advice and education supplied by the TIAA Retirement Advisor. Affiliates of TIAA are the registered investment advisers to the TIAA-CREF Mutual Funds, Nuveen Funds, CREF accounts and the TIAA Real Estate Account, and receive fees for providing investment advisory services. These fees are described in the applicable prospectuses.
TIAA Retirement Advisor:
You should consider your other assets, income and investments before making any investment decisions. The TIAA Retirement Advisor's objective is to help you reach your desired retirement income goal by helping you define a strategy based on asset allocation, savings and retirement age. It can also help you to allocate your assets while you are retired in order to help you maintain a sustainable income over your predicted lifespan.
The TIAA Retirement Advisor provides advice regarding your employer-sponsored retirement plan account administered by TIAA (your “Plan account”). TIAA Retirement Advisor forecasts your retirement income goals up to and through retirement. While TIAA Retirement Advisor helps you to evaluate your goals, the answers you receive are based on the accuracy of the information you provide. Retirement Advisor, working with Morningstar Investment Management, provides useful and timely financial forecast estimates, but depends on you, the participant, to provide the most accurate current assessment of your financial status and goals to ensure the output is meaningful.
Retirement Advisor makes certain assumptions about economic factors such as market performance, inflation rates, salary growth, taxes and social security based on econometric models and industry research. However, the market’s past performance does not predict future performance.
Any asset allocations provided through the TIAA Retirement Advisor consists of model portfolios constructed to span a range of risk profiles based on Morningstar Investment Management’s research-driven approach, to reflect different investor circumstances and are composed of target allocations for various asset classes. Projections generated by Retirement Advisor are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time.
Illiquid portions of the TIAA Traditional Annuity (“TIAA Traditional”) that you hold in your Eligible Retirement Plans may affect the advice provided where the recommended model portfolio includes a smaller percentage of TIAA Traditional than you currently hold and reallocation to other investments is prevented due to the illiquid nature of your existing holdings. This may cause the performance of your portfolio of Retirement Assets to differ from that of the recommended model portfolio.
If you access Retirement Advisor through a Financial Consultant and you have determined it is in your best interest to open a new plan through which you are eligible to contribute or rollover assets to TIAA, the TIAA Retirement Advisor may provide asset allocation recommendations on such rollover assets. Recommendations to the TIAA IRA or the TIAA Investment Solutions IRA are limited to the core investment options available, which currently consist of TIAA and certain affiliated investment products only. Investment allocation recommendations to an employer’s plan are limited to those investments offered by that employer. There may be tax consequences associated with a transfer of assets and differences in features and costs. For more information go to http://www.tiaa.org/public/pdf/Know_Your_Options_from_TIAA.pdf. Consult with your tax advisor regarding your particular situation. If you decide to have a rollover simulation created, the recommendations assume you will complete the rollover for which the simulation was done. If you do not intend to transfer those assets to TIAA, you should complete a new plan without the rollover simulation, as the recommendations may change. If you do complete the transfer, you should return to Retirement Advisor to update your profile and remove the account you no longer own to avoid the double counting of assets.
You may be provided with the opportunity to enroll eligible plan assets in the Retirement Plan Portfolio Manager program. This is a separate service provided by TIAA, FSB. It is a discretionary fee-based asset allocation program that provides ongoing management of eligible retirement assets.
Using the TIAA Retirement Advisor:
As a logged in user of TIAA Retirement Advisor, the Retirement Advisor may provide you with specific fund-level advice provided by Morningstar Investment Management regarding your Plan account. You should consider your other assets, income and investments before making any investment decisions. Please note that any pre-populated contribution rate information that is presented as part of your profile is an estimate only. It is your responsibility to verify this information. TIAA Retirement Advisor provides you with the ability to adjust your profile contribution rate information upwards or downwards accordingly. However, when your desired retirement age is less than or equal to your current age, you are considered retired, in which case Retirement Advisor assumes you are no longer contributing to your accounts. See the section below about Retiree mode for more information.
Please make sure to review and verify the assumptions contained in the report prior to implementing the recommended plan. If you log in to use the TIAA Retirement Advisor to implement a Retirement Advisor plan you received from a TIAA Financial Consultant, the last plan created will be available for a one time implementation within 2 days from the date of your session. If you are implementing advice obtained from a TIAA Retirement Advisor session that occurred more than 30 days ago, you should consider running another session prior to implementing reallocation changes to help ensure the advice remains timely.
The strategies illustrated in TIAA Retirement Advisor are designed to be implemented in their totality. Choosing to implement only part of a strategy may result in an investment strategy that does not correspond to your desired target allocations. For example, while accumulating assets for retirement, the asset allocation recommendations TC Services provides may differ if you elect not to increase your savings rate, plan to retire at a different age than suggested, or only implement some of the asset allocation recommendations. In retirement, the asset allocation and fund level recommendations may differ if you plan to spend more or less than the target retirement income in your selected strategy.
TIAA Retirement Advisor Data, Assumptions, and Methodology:
TIAA Retirement Advisor is appropriate for investors of all experience levels. Contextual help features are provided throughout the TIAA Retirement Advisor. Mouse over the icons throughout the online tool to access the specific contextual help features. The Frequently Asked Questions tab and How We Calculate and Provide Advice tab also provide contextual help. These features will help you further understand how the advice from Morningstar Investment Management is formulated through Retirement Advisor and the assumptions that it relies on.
Retirement Advisor allows you to enter profile and financial information related to your personal and financial situation. This information can include salary, age, state of residence, spouse/partner assets, dependents, retirement accounts, retirement income streams, social security retirement benefits, and risk preferences.
Your current or most recent salary is the basis for your estimated retirement need, contribution amounts and social security benefits. All of these combined factors have a material impact on the advice you receive. The salary growth is projected using long-term inflation projections from Morningstar Investment Management’s Capital Market Assumptions. These Assumptions are updated annually.
Desired Retirement Income
Your Desired Retirement Income defines the spending amount Retirement Advisor calculates that you and your spouse will require to sustain your desired lifestyle in retirement. You may enter a retirement income for you and your spouse or partner, if applicable, as an after-tax dollar amount. Once your desired retirement income is established, Retirement Advisor simulations will estimate what is required to maintain that income throughout retirement, to the last surviving individual. This helps ensure that you are provided with a solution which helps promote a sustainable lifestyle in retirement for you and your spouse or partner.
Estimated taxes in Retirement Advisor are formulated by Morningstar Investment Management and assume an estimate of your federal income, state income and capital gains taxes based on marginal tax rate calculations throughout all simulations. Federal and state tax rates are updated annually based on Internal Revenue Code and individual state sources. Incomes for you and your spouse or partner, if applicable, are used to estimate federal and state tax exposure. Your tax exposure is reduced, as applicable, for pre-tax salary deferrals. TIAA-CREF Individual & Institutional Services, LLC provides a range of brokerage and investment advisory services, but does not provide tax or legal advice. Consult a qualified tax advisor or attorney for specific tax or legal advice.
Required Minimum Distribution (RMD)
At age 72 the IRS applies a mandatory distribution from retirement accounts. The IRS waives the RMD requirement for accounts which are part of an employer-sponsored retirement plan when the participant continues to work for that employer. Morningstar Investment Management calculates RMDs in accordance with IRS publications 590, 575, and 939.
Social Security Benefits
Retirement Advisor will provide an estimate of Social Security for both participant and spouse or partner, if applicable, based on current salary information. Social Security payments are inflated using a simulated Cost of Living Allowance designed to replicate the actual Social Security Administration formulas (available at www.ssa.gov). While Retirement Advisor can estimate Social Security benefits, the most accurate payment information is available on your Social Security statement. If a statement is available, you should enter this benefit amount as an override value to help ensure the most relevant advice is provided.
In addition to standard payments, Retirement Advisor accounts for a reduction in benefits while working in retirement, increased benefits for a spouse that qualifies for the 50% rule and 100% benefit for the surviving spouse. Social Security benefits are not automatically distributed; the benefits must be applied for. Retirement Advisor assumes that you and your spouse complete all applications required to collect the maximum benefit. The spouse 50% Rule –applies when the spouse has not contributed to social security, or the spouse's benefits are less than 50% of the participant's; the spouse has the option of receiving 50% of the participant benefit at the max benefit age.
Desired Retirement Age
In accumulation mode, the TIAA Retirement Advisor assumes your target retirement age (and that of your spouse/partner if applicable) is age 67, or your current age plus 1 year if you are 67 or over, unless you indicate otherwise by using the edit functionality of the tool. If you indicate you are retired, you will need to enter the age you were when you retired.
Estimated Retirement Income Projection Methodology
Retirement Advisor, using Morningstar Investment Management's proprietary methodology may provide education on savings rate, asset allocation, and retirement age, based on the participant’s retirement income goal, with an aim of achieving a 70% likelihood of success. Since each output is dependent on other factors, changing a single factor may alter your strategy in other areas. For example, by reducing the desired retirement income goal, the savings rate, retirement age, and asset allocation may be impacted.
The likelihood of success is determined by a statistical methodology know as Monte Carlo Simulation. Retirement Advisor runs your current strategy through a minimum of 500 investment simulations and determines how many of the simulations provide you with assets until the end of your estimated retirement need, and how many simulations indicate a shortfall. The objective is to develop a proposed strategy which creates sustainable income for your anticipated retirement need. This disciplined approach to investing and saving for retirement helps to ensure that you are able to maintain your lifestyle throughout retirement, even when faced with years of market volatility. The service solves for a likelihood of success to be 70% or more, which means that 7 out of 10 times your plan provides you with assets until the end of your estimated retirement needs.
The impact of taxes on your current and future income is estimated when calculating income projections and wealth projections. The system will estimate your tax rates based on the salary information you provide plus applicable Social Security and pension plan payments, pre-tax retirement plan contributions, state of residence, number of dependents, marital status, and other factors. The tax rate assumptions impact Morningstar Investment Management’s calculation of your after-tax income, the ongoing value of your taxable portfolios, and the taxability of any Social Security distribution. There is also an impact due to any regular or early retirement plan withdrawals (pre age 59 ½) you are projected to take. Income brackets are used to determine the tax impact within investment portfolios. Portfolios indexed to inflation will reflect how the IRS historically adjusted these brackets.
In accumulation mode, the retirement income projection provided by Morningstar Investment Management assumes you will annuitize any TIAA Traditional you may hold when you retire, with the exception of TIAA Traditional held in 457 (f) plans, Transfer Payout Annuities, TIAA IRAs (index IRAs), and/or in a contract where an IRS payment failure is detected when TIAA Traditional is annuitized. This is not a recommendation to annuitize TIAA Traditional but a means to determine a probable income in retirement. You should consider all factors of annuities, such as fees, illiquidity, and the irrevocable nature of the decision to annuitize. Any assets not held in TIAA Traditional are assumed to be spent down as cash to help you meet your income goal. This projection is for hypothetical illustration purposes only and is not a recommendation to annuitize TIAA Traditional. For retirees the income projection assumes any TIAA Traditional in your portfolio will not be annuitized and will be spent down overtime.
Retirement income projections do not take into account any plan rules and assumes all accounts are available for withdrawal and are without liquidity restrictions.
Important distinction between current, proposed and alternate strategy estimated retirement income projections
Retirement Advisor may show you three estimated retirement income projections, a current, a proposed and an alternate. All three strategies incorporate all of the data assumptions provided in this document and apply the projection methodology describe above. However, each of these projections differs as follows:
The current strategy retirement income projection assumes you maintain your current investments throughout your life. However, if you hold a single Target Date Fund or TIAA RetirePlus Series model portfolio in any of your accounts, this projection assumes that the Target Date Fund or TIAA RetirePlus Series model portfolio will become more conservative over time.
The proposed strategy retirement income projection assumes you implement the allocation advice provided by Retirement Advisor for your selected accounts, including any increased in savings rate and retirement age, and continue to come back to Retirement Advisor to implement allocation advice each year. Because the allocation advice will generally become more conservative over time, this projection assumes the same. If you hold a single Target Date Fund or TIAA RetirePlus Series model portfolio in any of your accounts, and you have de-selected it from receiving allocation advice, this projection assumes that the Target Date Fund or TIAA RetirePlus Series model portfolio will become more conservative over time.
The alternate strategy retirement income projection assumes you implement the allocation advice provided by Retirement Advisor for a risk level that you choose for your selected plans along with any changes to your savings rate and retirement age that you determine. It also assumes you will continue to invest in this same risk level throughout your lifetime. If you hold a single Target Date Fund or TIAA RetirePlus Series model portfolio in any of your accounts, and you have de-selected it from receiving allocation advice, this projection assumes that the Target Date Fund or TIAA RetirePlus Series model portfolio will become more conservative over time.
Retirement Advisor assumes any contributions to your retirement plan accounts will be dedicated to retirement and you will not liquidate such assets for use prior to retirement (e.g., through early withdrawals).
Retirement Advisor provides education on a strategy for your overall savings rate and optimal savings allocation to help you meet your retirement goal. Retirement Advisor solves for the savings rate which allows a 70% likelihood of success given your desired retirement income and desired retirement age. Retirement Advisor may suggest you increase savings to help you meet your retirement goals. Retirement Advisor will not advise a savings rate in excess of 25% of your income. However, if your current savings rate exceeds 25%, Retirement Advisor will continue to use your defined savings rate. Savings rate advice is not provided in Retiree mode (see section on Retiree Mode below).
Reallocate your TIAA Assets
Here are illustrative portfolio reallocations for your selected accounts with proposed allocations for current and future contributions that are designed to apply an overall diversified asset allocation that aligns with your risk level, investment time horizon and retirement savings goal to each of your selected accounts independently (and not optimized across such accounts). Please carefully review the "Important Information" section of this report and make sure you understand these illustrations before you decide to reallocate your investments or contributions. IMPORTANT LIMITATIONS APPLY FOR PROPOSALS CONSIDERING MULTIPLE PLANS AND ACCOUNTS.
Asset Allocation Advice
The TIAA Retirement Advisor will propose an investment strategy for plans and accounts you select with a specific risk level for you based on your goals and financial circumstances. This risk level, formulated by an independent financial expert, is designed to adjust over time using Morningstar Investment Management’s proprietary methodology. Based on academic research, this methodology customizes a risk level trajectory based on the information you provide.
Generally, it will assume that your risk level will become more conservative as you approach retirement. If you prefer, you can set your own risk level, based on personal risk tolerance, by creating and selecting an alternate strategy. In such case, Morningstar Investment Management will use a fixed risk tolerance model (i.e., one that will not adjust over time) to calculate the advice provided through the TIAA Retirement Advisor. In other words, it will assume that your risk level will remain static throughout the projection. Therefore, if your risk tolerance changes, you should consider running a new TIAA Retirement Advisor session.
Asset Allocation Across Multiple Plans and Accounts
If you choose to have TIAA Retirement Advisor apply an asset allocation across multiple plans or accounts, the tool will apply the same asset allocation across each plan or account independently of the others. Thus, reallocation proposals will be based on the assets and asset classes available exclusively in each plan or account and will not consider or optimize proposals across all plans and accounts with respect to the particular investments, funds, share classes, vintages, crediting rates or other attributes of the investments available or held in such plans and accounts. Accordingly, before implementing a reallocation proposal, you should consider whether the proposed investment allocation could be implemented in a more optimized manner across your plans and accounts, a function not currently available as part of the TIAA Retirement Advisor.
Retirement Advisor will provide fund-level recommendations if your plan sponsor has elected to make fund-level advice available. The fund-level advice provided by Morningstar Investment Management is limited to those funds and share classes of funds offered by that employer. The funds and their respective share classes have different fees and costs. Fees and costs, including expenses associated with funds and their share classes, will reduce any amount of money you make on your investments over time. Recommendations to the TIAA IRA or the TIAA Investment Solutions IRA are limited to the core investment options available, which currently consist of TIAA and certain affiliated investment products only.
Software Methodology Limitations Regarding TIAA Traditional
The TIAA Retirement Advisor does not recognize, or take into account, different crediting rates applied to TIAA Traditional Annuities opened in different years (i.e., vintages). It is possible to have TIAA Traditional in multiple contracts, multiple plans, and/or multiple accounts. If you hold TIAA Traditional, you should confirm and consider the crediting rates of each when reallocating your accounts (or implementing a TIAA Retirement Advisor reallocation proposal) so that you do not inadvertently sell annuities available to you that have higher rates. This may require you to adjust the illustrative reallocations shown in this report when implementing changes to your account. You can review your TIAA Traditional crediting rates on tiaa.org via your secure log in.
Please note that if you having been saving over time and hold more than one TIAA Traditional annuity “interest rate bucket,” or vintage, those can have different crediting rates within the same contract and assets are sold on a pro rata basis across vintages. In addition, certain TIAA Traditional annuity contracts are oriented towards long-term growth to create retirement income and have withdrawal provisions limiting liquidity in return for potentially higher crediting rates and payouts of lifetime income in retirement. Therefore, depending on your current allocation to TIAA Traditional within certain contract types, you may not be able to achieve the recommended allocations to TIAA Traditional. Instead, Retirement Advisor, considering these assets in TIAA Traditional, will allocate other assets in your plan to attempt to achieve the overall risk level asset allocation of this plan.
Retirement Age Advice
Retirement Advisor provides a strategy that is designed to promote sustainable income beginning at your desired retirement age. To help you achieve this sustainable income goal, Retirement Advisor may recommend an optimal retirement age that extends beyond your desired retirement age.
Retiree mode is exclusively for users who consider themselves retired or no longer in the "accumulation phase" of retirement planning. In this context, "retired" means you have ceased working on a daily basis in your given vocation, and you are no longer contributing to your retirement plan. You enter retirement mode when you choose "Already Retired" on the first page of Retirement Advisor. In Retiree mode your current age must be equal to or greater than your retirement age.
Based on the information you provide, retiree mode gives you asset allocation advice and where available, fund-level recommendations for your current investible retirement plan assets that are recordkept at TIAA. It also provides useful information about the sustainability of your chosen income level in retirement. Information required from you includes the age you retired, your most recent salary prior to retiring, and your desired monthly after-tax income in retirement. Other information may include held-away retirement assets, expected social security benefit, any other expected income sources, and spouse/partner profile and asset information.
Importantly, Retirement Advisor's Retiree mode does not provide annuity illustrations or recommendations on a retirement distribution plan, such as how much to systematically withdraw from retirement accounts or whether to annuitize all or part of your retirement assets to create an income stream. It also does not provide Advice on how much money to take as income on a systematic basis.
Retiree mode, assumes that you continue to have investible retirement assets recordkept by TIAA, and that information provided by you is complete and accurate. It also assumes you are currently, or within a year will begin, systematically receiving income from the retirement resources that you provided to Retirement Advisor. In addition to TIAA recordkept plans, Retirement income resources may include social security benefits, defined benefit plans, systematic withdrawals, immediate annuity contracts, or any other source of income in retirement.
Similar to the accumulation phase, the TIAA Retirement Advisor in Retiree mode will propose an investment strategy with a specific risk level for you based on your financial circumstances and risk preferences if provided. This risk level, formulated by Morningstar Investment Management, is designed to adjust over time using Morningstar Investment Management’s proprietary methodology. Based on academic research, this methodology customizes a risk level trajectory based on the information you provide. Generally, it will assume that your risk level will become more conservative over time. If you prefer, you can set your own risk level, based on personal risk tolerance, by creating and selecting an alternate strategy. In such case, Morningstar Investment Management will use a fixed risk tolerance model (i.e., one that will not adjust over time) to calculate the advice provided through the TIAA Retirement Advisor. In other words, it will assume that your risk level will remain static throughout the projection. Therefore, if your risk tolerance changes, you should consider running a new TIAA Retirement Advisor session.
Retirement Advisor provides you with the likelihood, on a percentage basis, that you can sustain your desired retirement income throughout retirement. This is based on the various retirement income resources entered into Retirement Advisor, your predicted life expectancy (see Life Expectancy section below for more information), and by using the same Monte Carlo simulation methodology described in the Income Projection section earlier. It assumes you are currently taking income at this desired level, or plan to begin taking such income within the year. Since Retirement Advisor Retiree Mode does not provide advice on income levels, this information is provided for educational purposes only. Generally, a likelihood of 70% or higher is considered successful. If Retirement Advisor Retiree mode determines that your likelihood of success is below 70%, it provides a second, hypothetical income level that would provide a retired investor under similar circumstances a likelihood of success of at least 70%.
In retirement, any distributions taken above your desired income (for example, to satisfy required minimum distributions) are assumed to be reinvested for use later in retirement. Retirement income projections do not take into account any plan rules and assumes all accounts are available for withdrawal and are without liquidity restrictions.
The retirement income projection assumes the following estimated life expectancies: a male, age 67, will live until age 91 and a female, age 67, will live until age 93. These assumptions are based on an approach which uses the Gompertz Law of Mortality table to determine life expectancy. The approach and estimated retirement income results are developed, owned, and generated by Morningstar Investment Management. An excerpt of the Gompertz Law of Mortality table can be found in “How Retirement Advisor Calculates and Provides Advice”. It is important to note that these life expectancy assumptions are longer than average, meaning that only 30% of the population is estimated to reach these ages. This may cause your estimated retirement income result to be lower (and your estimated retirement savings needs to be higher) than if a shorter life expectancy was assumed. These assumptions may not be appropriate for all investors. You should consider your own personal health and expected longevity when viewing your estimated retirement income result. Forecasts involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially and/or substantially from your estimated retirement income result.
IMPORTANT : Projections or other information generated by the Morningstar Investment Management software program used by the TIAA Retirement Advisor regarding the likelihood of various investment outcomes are hypothetical, do not reflect actual investment results and are not a guarantee of future results. Results may vary with each use and over time. The projections are dependent in part on subjective assumptions, including the rate of inflation, tax rates and the rate of return for different asset classes. These rates are difficult to accurately predict. Changes in the law, financial markets, or your personal circumstances can cause substantial deviations from the estimates. This could result in declines in the account’s value over short or even extended periods of time. While the advice given through the TIAA Retirement Advisor is based on strategies consistent with prudent long-term investing and diversification principles, any investment is subject to risk. These risks are described in the securities’ respective prospectuses. The prospectuses, which provide additional information on investment objectives, charges and expenses, should be read carefully prior to investing. Visit www.tiaa.org or call 877 518-9161 for a prospectus. TIAA Retirement Advisor is not a substitute for a comprehensive financial plan. You should not rely on the report as a primary means of planning for retirement. You should periodically monitor your retirement strategy as your needs and circumstances change.
TIAA-CREF Individual & Institutional Services, LLC provides a range of brokerage and investment advisory services, but does not provide tax or legal advice. Consult a qualified tax advisor or attorney for specific tax or legal advice.
The TIAA Retirement Advisor is a brokerage service provided by TIAA-CREF Individual & Institutional Services, LLC, a registered broker/dealer, Member FINRA and SIPC.
The TIAA Retirement Plan Portfolio Manager program is a discretionary fee-based asset allocation advisory program provided by TIAA, FSB.
Certain securities may not be in the best interest of all investors. Securities are subject to investment risk, including loss of the principal amount invested.
Investment (including securities), 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. The mutual funds available through TIAA and CREF including available share classes and certain funds within a fund family, may change over time at TIAA’s discretion.TIAA-CREF Individual & Institutional Services LLC, Member FINRA and SIPC, distributes securities products. Advisory services provided by Advice & Planning Services, a division of TIAA-CREF Individual & Institutional Services, LLC, a registered investment adviser. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financial condition and contractual obligations.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please contact your financial advisor or call 877-518-9161 for a current prospectus that contains this and other information. Please read the prospectuses carefully before investing.
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