Important Information About Using the Retirement Plan Comparison Tool

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Your employer-sponsored retirement plan is a valuable benefit and a way to invest for your future. As an eligible employee you have a limited window of time to choose between two very different retirement plans - a or a . There are inherent benefits and risks of each type of retirement plan offered to you.

It's important that you consider the risks and benefits of each plan and your personal situation before you make a final election decision. Read more information on both types of plans.

Defined Contribution Plans:

  • Education and investment knowledge - Participant should understand investment decisions and evaluate current circumstances and risk tolerance.
  • Investment risks/returns - Participant assumes the risk that poor market conditions could negatively impact investment returns in the short and long term.
  • Security - Unforeseen circumstances could deplete the account balance prior to retirement (such as financial hardship, plan loans, job changes, etc.)
  • Contributions and access - Contributions (and investment earnings) must be sufficient to provide desired level of assets and income after retirement. The participant is responsible for continuing contributions to the plan (not diverting retirement assets to other current or pressing financial obligations).
  • Longevity and Cognitive Risks - Participant may outlive the assets in their account, or lose the cognitive abilities to invest in their account appropriately.

Defined Benefit Plan:

  • Investments - Investments are the responsibility of the plan sponsor (not the participant).
  • Funding - The plan could be at risk of insufficient funding by the plan sponsor.
  • Duration of employment - A shorter time of employment could result in a smaller accrued benefit.
  • Vesting - It may take longer to be fully entitled to benefits than in a defined contribution plan.
  • Tax savings - These are potentially limited (no pre-tax deductions from salary).
  • Additional benefits - An early retirement subsidy is offered by some defined benefit plans after a participant completes a specified period of employment, sometimes coupled with attaining a specified age. Important: Employees who have reached (or are near) 'early retirement', as defined under the Institution's plan, could lose valuable early retirement subsidies upon transition to a defined contribution plan.

This tool does not consider prior participation in an employer-sponsored retirement plan. In making your decision, it's important to read all of the information provided concerning the use of this tool, including the Methodology & Assumptions. You should consider consulting a financial advisor before making an irrevocable decision.

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Important: You can supplement your retirement savings regardless of the plan you choose. It is recommended that you consult with a tax or financial advisor prior to making any elections.

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

The calculation performed is purely hypothetical for comparative purposes only and does not take into account any specific objectives or circumstances of any particular investor, nor does it suggest any specific course of action. The graphic comparison output is based on user entered information and is in no way guaranteed by TIAA or the employer. Your results may vary from the graphic comparison. Investment decisions should be made in consultation with an investor's personal advisor based on the investor's own objectives and circumstances before making an irrevocable decision.

TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distribute securities products.