When should I make a 1035 exchange?
A 1035 exchange allows you to move an annuity from one provider to another without an unnecessary tax penalty. Consider making a 1035 exchange to lower product fees or gain other advantages.
If you withdraw money from an annuity during the contract's surrender period, you may have to pay a surrender charge to the annuity issuer. After the period expires, a 1035 exchange allows you to move one annuity into another one without a tax penalty.
Why should I consider exchanging my current annuity?
- Low management fees (low-cost).5
- Our deferred variable annuities have no surrender charges.
- The less you pay in annuity fees, the more you'll potentially have to turn into retirement income.
How can a low-cost annuity affect my savings?
See how much you can save by exchanging to TIAA with our Annuity Cost Saving Tool. (Not approved for use in the state of Oregon.)
The illustration below shows how a low-cost annuity can help your savings grow over a 25-year period.
Assumptions:
- $100,000 initial investment
- 6% annual rate of return
- Average annual annuity expens charge for the Intelligent Variable Annuity: 0.35% for years 1 - 10; 0.10% for years 11+
- Average annual annuity expense charge for the average annuity: 1.30%
This is a hypothetical example for illustrative purposes only. It is not intended to predict or project investment results/future values. There are risks associated with investing in securities, including loss of principal. Also, lower annuity fees do not always result in higher returns.
What should I consider?
Before transferring assets or replacing an existing annuity, be sure to carefully consider the benefits of both the existing and new product. There will likely be differences in features, costs, surrender charges, services, company strength and other important aspects.
There may be tax consequences associated with the transfer of assets and an exchange may not always be your best option. Consult with your advisor regarding your particular situation.
To learn more about how our personal annuities may fit into your retirement plan, speak with one of our annuity representatives, today. Call 877-554-8282 or schedule a call.
*The expense ratio on all mutual fund products and variable annuity accounts managed by TIAA-CREF is generally less than half the mutual fund industry average Applies to mutual fund and variable annuity expense ratios. Source: Morningstar Direct, March 31, 2015. 67% are less than half their respective Morningstar Universe average and 59% are less than half their respective Morningstar Universe median. 94% of our annuity subaccounts and mutual funds were in the lowest quartile for fees according to Morningstar Direct as of March 31, 2015.