Need help on TIAA and Cref

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Bennie
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Need help on TIAA and Cref

Post by Bennie »

Thanks for any help!

I wish to retire now, at 56, and have funds in TIAA, Cref, and Fidelity.

Very confused.

Is TIAA and/or Cref still ok? Had a very strange consultation with a TIAA advisor/representative (rep). Also having trouble with their website and looked at the internet to see how the company is doing because of all this. Did not seem to look good. Some bad press, but it is a huge company...

My concerns: should I remove funds from TIAA, Cref, or both *before* I retire? The rep said it is easier to move monies while I am pre-retirement / still an active contributor versus post-retirement (that is the only really helpful thing I got out of our consultation, I feel, and I am not even sure it is true, but it might be).

My questions:

1) what do bogleheads make of TIAA and Cref now? Is it safe to have money in the compay (companies)?
2) should I move my money out (to Fidelity, to another 401(k)) while I am still employed?
3) I was thinking of leaving the TIAA Traditional portion in TIAA and buying a (small) annuity because it is so hard to move money out of TIAA Traditional. Some, supposedly, easier to move than other amounts - seems to depend on how it was entered (by my employer match or by the employee / me). They speak of a loyalty bonus for the annuity, if I buy one that seems to make up about 25% on what I would be getting. I am confused about that, too: what is this loyality bonus? free money? where does it come from? should I take it? Seems painful to move money over the course of 10 years and may be best to diversify, by having some income from a TIAA Traditional Annuity, and take advantage of the bonus?

The rep said I could start the annuity at 56 (?), and about 25% of the amount were the loyalty bonus. I am not sure I understand their calculations. He seemed to show me an 8% withdrawl rate. Is that adjusted to current interest rates and will drop? Trying to get more help from TIAA with another rep for a second opinion, but also really appreciate any insights / questions I should ask / comments that you could help me with. :?
Last edited by Bennie on Thu Jun 08, 2023 5:36 pm, edited 1 time in total.
tibbitts
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Re: Need help on TIAA and Cref

Post by tibbitts »

I believe the calculations you'll get if you contact TIAA about annuitizing your account will actually represent what you'll receive, and that's what matters more than understanding how TIAA arrived at the amounts. I'm not a TIAA expert but have a third of my retirement assets at TIAA and have no more concerns about TIAA than I do about Vanguard or Fidelity, where I also hold investments. In fact I've moved about 10% of my retirement assets from Vanguard to TIAA.

I haven't annuitized any of my TIAA accumulation, but have that as an option for the future.
crefwatch
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Re: Need help on TIAA and Cref

Post by crefwatch »

I don't care whether you give any dollar numbers, but you need to sketch the percentages of your money at various providers, and whether it is taxable or a Qualified retirement (tax-deferred) plan. Do you have a Roth? Any chance your employer has any rules about withdrawals before 59 1/2? Any chance of 10% tax penalty before 59 1/2?

It's also ESSENTIAL when asking about TIAA to say which TYPE of TIAA account you have. Is it RA, SRA, GSRA, RC, RCP, IRA, whatever? This is crucial in determining whether you might have time restrictions on TIAA Traditional. We also need to know which Unit (share) Class you have in CREF. The four classes have widely varying ERs, from incredibly-bargain to punishingly high. We can't answer your questions without this info. Do you have online access to your TIAA account? This is an easy way to look up the account type, if it doesn't show on your Quarterly Statements.

You have a lot of research to do, to make an educated decision about TIAA and CREF. It's a complex system, but one that has given lots of people comfortable retirements at reasonable cost. But if you already have a lot of money elsewhere, it may not be worth the trouble to read up on every detail. This list (following) is a fire hose!

Should I move from TIAA to another provider?
viewtopic.php?f=1&t=327663
viewtopic.php?f=1&t=327725

Roth 403(b)
viewtopic.php?f=10&t=324676

What the heck is TIAA?
viewtopic.php?f=2&t=324239
viewtopic.php?f=2&t=366802
CREF:
viewtopic.php?f=1&t=367072

TIAA-Cref vs. Vanguard for 403b
viewtopic.php?f=1&t=326591

What the heck is a CREF VA?
viewtopic.php?f=1&t=365646

TIAA Trad White Paper
https://www.tiaa.org/public/pdf/TT_FAQ.pdf

https://www.tiaa.org/public/pdf/underst ... choice.pdf
tibbitts
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Re: Need help on TIAA and Cref

Post by tibbitts »

crefwatch wrote: Wed Jun 07, 2023 8:24 am But if you already have a lot of money elsewhere, it may not be worth the trouble to read up on every detail. This list (following) is a fire hose!
I sort of agree except that as in my case, after learning about alternatives you might want to move more money into TIAA from elsewhere, obviously assuming your contract and regulations allow that.
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ResearchMed
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Re: Need help on TIAA and Cref

Post by ResearchMed »

tibbitts wrote: Wed Jun 07, 2023 8:57 am
crefwatch wrote: Wed Jun 07, 2023 8:24 am But if you already have a lot of money elsewhere, it may not be worth the trouble to read up on every detail. This list (following) is a fire hose!
I sort of agree except that as in my case, after learning about alternatives you might want to move more money into TIAA from elsewhere, obviously assuming your contract and regulations allow that.

After tax accounts and TIRA/Roth IRA accounts are still possible at TIAA even if one's 403b type account doesn't allow any transfers in.

Some of the expense ratios might be slightly higher for some CREF variable annuities/funds, depending upon whether you had lower ER-versions in the Employer account. And you can't get Trad Ann there, but one can buy TREA and most (all?) other holdings.
However, most people do not want "everything" in Trad Ann, so one could keep the 403b money in Trad Ann, and use the other account types for other holdings.

One advantage of having TREA in more than one account is that the "once per quarter" restriction on removing money from TREA is "per account", not per person. OTOH, that $150k limit for most new money into TREA is per person, not per account.

RM
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bh1
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Re: Need help on TIAA and Cref

Post by bh1 »

I will chime in with no real added information. I've been with TIAA(-CREF) on and off for 40-odd years, and I don't like them at all. No one wants to read the details. Right now I have all my employee-related funds there because my plan has Vanguard funds available with lower fees than elsewhere. If that were not the case, I would move all available funds elsewhere if I had an alternative 403(b) and maybe even to an IRA.

As far as TIAA Traditional goes, I've read here that 3% guaranteed is worth keeping if you have that. I got rid of my Traditional years ago, wise or not.
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Re: Need help on TIAA and Cref

Post by crefwatch »

ResearchMed wrote: Wed Jun 07, 2023 9:13 am After tax accounts and TIRA/Roth IRA accounts are still possible at TIAA
...And you can't get Trad Ann there, but one can buy TREA and most (all?) other holdings.
Maybe I'm misunderstanding, but my older ATRA certainly has TIAA Traditional, with the same restrictions and guarantee as an RA account. However, I didn't set up the ATRA account. TIAA set it up by fiat, when they "had" to remove post-tax money from my first employer's RA, back when you could make "optional contributions."

However, I am not urging the OP to open up an ATRA. He doesn't have enough information yet to know if he likes or want TIAA products.
stlrick
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Re: Need help on TIAA and Cref

Post by stlrick »

Bennie wrote: Tue Jun 06, 2023 10:55 pm Thanks for any help!

I wish to retire now, at 56, and have funds in TIAA, Cref, and Fidelity.

Very confused.

Is TIAA and/or Cref still ok? Had a very strange consultation with a TIAA advisor/representative (rep). Also having trouble with their website and looked at the internet to see how the company is doing because of all this. Did not seem to look good. Some bad press, but it is a huge company...
No one seems have have responded directly to this part of your question, so I'll try. First of all, TIAA and CREF are one company, which used to be known as TIAA-CREF, but now is just TIAA. Second, I can't imagine what you saw online that "did not seem to look good" if you are talking about the stability and safety of investments with the company. You can certainly find many complaints about the complexity of investments in the TIAA system, but anything questioning the stability of the company is 100% fake news. Ignore it.
student
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Re: Need help on TIAA and Cref

Post by student »

It is good that some of the most knowledgeable people have already replied. So I don't have too much to add. Personally I do not like bond index, so I use TIAA Traditional as a substitute for essentially for bond as my fixed income. My 403b is spread about equally between Fidelity and TIAA and I plan to keep it this way.
thenow
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Re: Need help on TIAA and Cref

Post by thenow »

I was with TIAA and CREF for over 40 years. I mainly invested monthly on the CREF side and avoided the traditional TIAA opportunity. Right before I retired at the end of 2007 I shifted some CREF money over to the traditional TIAA for perceived need for monthly cash flow. (Interest only and then RMD when reaching 70 and a half. Vanguard helped me transfer the CREF 403b to an ira. One phone agent gave me a hard time in transferring money over to Vanguard. As a side note, I’m now with Fidelity.

I made two mistakes. One I didn’t need cash flow for retirement and the go go years of equity was missed. More importantly, I decided to cash out the traditional TIAA over a ten year period. I lost a lot of previous flexibility in asset allocation decisions as well as paying IRRMA and NIIT yearly charges. I thought the opportunity cost was too great in keeping the TIAA traditional and thus took the 10 year withdrawal plan. In sum, depending on your retirement needs a TIAA may or may not be prudent. It does give you some steady cash flow during retirement. But, with a traditional, depending on the specific contracts (which are very confusing when I taught at different universities) you do loose some flexibility if you decide you want the money…it takes 10 years to get it. I’m 80 and have another 5 more years to empty the TIAA amount. Good luck with your decision.
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ResearchMed
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Re: Need help on TIAA and Cref

Post by ResearchMed »

crefwatch wrote: Wed Jun 07, 2023 10:56 am
ResearchMed wrote: Wed Jun 07, 2023 9:13 am After tax accounts and TIRA/Roth IRA accounts are still possible at TIAA
...And you can't get Trad Ann there, but one can buy TREA and most (all?) other holdings.
Maybe I'm misunderstanding, but my older ATRA certainly has TIAA Traditional, with the same restrictions and guarantee as an RA account. However, I didn't set up the ATRA account. TIAA set it up by fiat, when they "had" to remove post-tax money from my first employer's RA, back when you could make "optional contributions."

However, I am not urging the OP to open up an ATRA. He doesn't have enough information yet to know if he likes or want TIAA products.

Thanks.
I may not understand just what an ATRA is... is it different from a regular after-tax "taxable" account, the kind one can have anywhere? (Just transfer cash from a bank or paycheck, for example, then buy stocks or funds or whatever...)?

I don't (didn't?) think a regular taxable account could include Trad Ann, and that was the type of account I was thinking of above.

I'm also a bit confused about the treatment of the "optional contributions".
We have "optional contributions" in our TIAA 403b account, in addition to the Employer's contribution. Is that different from what TIAA "had to remove"?

... and just when I thought it couldn't/wouldn't get even *more* confusing...!
:annoyed

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crefwatch
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Re: Need help on TIAA and Cref

Post by crefwatch »

stlrick wrote: Wed Jun 07, 2023 11:16 am First of all, TIAA and CREF are one company, which used to be known as TIAA-CREF, but now is just TIAA.
stlrick, thanks for your useful comments about quality and safety at TIAA and CREF. It's not an important point, but as of today, 6/7/23, TIAA is a NY State Regulated Insurance Company with a promise in its charter to operate in a not-for-profit manner. CREF is a NY State Type B (I think ... ) Not For Profit Corporation. TIAA has managed to get bills introduced (this is my opinion, not a demonstrated "fact") in the NY State Legislature to fold CREF into TIAA, and cease CREF's existence as an independent corporate entity. They are not yet law.

It can be argued whether that is an overdue, good thing, or an abrogation of a public-service promise of the 1950's.

It is true that they elected, a few years ago, to use "TIAA" as a business name for the entire enterprise. To me, that makes references to "TIAA" to require a modifier to indicate whether one is referring to a TIAA Insurance product (like TIAA Traditional Annuity), or to all products from "the company".
Scubadude
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Re: Need help on TIAA and Cref

Post by Scubadude »

crefwatch wrote: Wed Jun 07, 2023 8:24 am I don't care whether you give any dollar numbers, but you need to sketch the percentages of your money at various providers, and whether it is taxable or a Qualified retirement (tax-deferred) plan. Do you have a Roth? Any chance your employer has any rules about withdrawals before 59 1/2? Any chance of 10% tax penalty before 59 1/2?

It's also ESSENTIAL when asking about TIAA to say which TYPE of TIAA account you have. Is it RA, SRA, GSRA, RC, RCP, IRA, whatever? This is crucial in determining whether you might have time restrictions on TIAA Traditional. We also need to know which Unit (share) Class you have in CREF. The four classes have widely varying ERs, from incredibly-bargain to punishingly high. We can't answer your questions without this info. Do you have online access to your TIAA account? This is an easy way to look up the account type, if it doesn't show on your Quarterly Statements.

You have a lot of research to do, to make an educated decision about TIAA and CREF. It's a complex system, but one that has given lots of people comfortable retirements at reasonable cost. But if you already have a lot of money elsewhere, it may not be worth the trouble to read up on every detail. This list (following) is a fire hose!

Should I move from TIAA to another provider?
viewtopic.php?f=1&t=327663
viewtopic.php?f=1&t=327725

Roth 403(b)
viewtopic.php?f=10&t=324676

What the heck is TIAA?
viewtopic.php?f=2&t=324239
viewtopic.php?f=2&t=366802
CREF:
viewtopic.php?f=1&t=367072

TIAA-Cref vs. Vanguard for 403b
viewtopic.php?f=1&t=326591

What the heck is a CREF VA?
viewtopic.php?f=1&t=365646

TIAA Trad White Paper
https://www.tiaa.org/public/pdf/TT_FAQ.pdf

https://www.tiaa.org/public/pdf/underst ... choice.pdf
Read this ^^^^^ study it. TIAA is extremely difficult to navigate- yes I do think in my situation it’s great and I’m appreciative to have access to products.
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Re: Need help on TIAA and Cref

Post by crefwatch »

ResearchMed wrote: Wed Jun 07, 2023 11:42 am ... and just when I thought it couldn't/wouldn't get even *more* confusing...!
I'm sorry if I made it worse. A taxable investment or brokerage account at TIAA is not the same thing as an After-Tax Retirement Annuity. There's a nearby thread with a link to an ATRA brochure on another Boglehead's online storage site. In summary an ATRA provides tax-deferral of investment earnings, using after-tax principal from the customer. Only the earnings get taxed when the money is removed. There are no RMD's required.

(I don't mean to quibble annoyingly about whether "taxable" and "after-tax" mean the same thing or not. I'm just explaining why I wrote what I did!)

Apparently TIAA is willing to open "ordinary" brokerage and investment accounts for customers who want them. These are, broadly, just like opening up a similar account at Fidelity, Vanguard, or T. Rowe Price. Most provider writing describes these as "taxable accounts." Even though I have consolidated my IRAs entirely at TIAA, I can't imagine why someone would voluntarily put their taxable investment account at TIAA. It's like going directly to the Root Canal doctor because you had a minor tooth-ache!

When I used the term "optional contributions", it was a 1970's-1980's term at TIAA. The ONLY type of account that existed was RA, and when I left my first (college) employer, for several years I had NO retirement plan at various small Not For Profits. TIAA then allowed "optional contributions" that were deposited directly into the SAME RA account I had at the small New England college. Some years later, apparently, IRS rule revisions put the kibosh on the whole idea, and TIAA (claimed that they ...) tracked all my such investments, AND their earnings, and moved them to an ATRA established for the purpose.

In case it's not obvious, they were called "optional contributions" because no employer mandate or matching rules were involved. I had the option to do this, or not. Today, you might regard that sort of 403(b) money as, like a Non-Deductible IRA Contribution, which I have always avoided like the plague.
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Re: Need help on TIAA and Cref

Post by yohac »

Bennie wrote: Tue Jun 06, 2023 10:55 pm 2) should I move my money out (to Fidelity, to another 401(k)) while I am still employed?
If you can do that, I would. My experiences with TIAA were not exactly horrible, but irritating enough that I pulled everything out - after jumping through more hoops than I thought necessary. If you like the Traditional account, that's a reason to stay. Otherwise if you are someone who values simplicity and transparency (as I am) then TIAA is exactly the wrong place to be.
Mike83
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Re: Need help on TIAA and Cref

Post by Mike83 »

45 years contributing to, or getting RMDs from, TIAA. To OP's points--

• SAFETY

Trad and Annuities are backed by the creditworthiness of TIAA, an insurance company. This is different from VG, Schwab, Fidelity, where your investments are segregated and owned by you regardless of brokerage business conditions.

* WEBSITE

Poorly imagined, difficult to get the big picture and difficult to drill down to understand cost and performance of underlying investments.

• COST

Annuity products have built-in mortality expense, even if it is likely you never intend to annuitize. Investments are often grouped by employer contract, each with its list of investable funds. In many cases, the funds offered carry an expense ratio that would repel members of this forum. Usually there is one general stock fund and one broad bond fund that fall into an acceptable expense range but still exceed the big brokerages by.factor of three.

• TRANSFERS

Do-able but each employer contract has its own defined limitations and investment opportunities. If you mingle them you may lose beneficial aspect of one or more.

• RECOMMENDATIONS

AFTRAs can postpone and compound un-needed retirement income flow, lessening IMMA and taxes. I have one for this purpose. Currently they offer good crediting rates for new money in TRAD. Not bad for fixed income portion of portfolio, you can also start the 9 year conversion process at any time without penalty, which will transfer that portion into an accessible investment account while still maintaining its AFTRA tax status. Again, useful for a bond portfolio.

TRAD is useful if your historic or current crediting and guaranteed rates are competitive with what you can get elsewhere for your planned time horizon. 2yr? 5yr? 10yr? Longer than that you may want an equity component, but again that component is best inveted elsewhere.

TIAA Life Insurance and TIAA Real Estate were gems. They stopped offering Life, and the Real Estate fund is suffering terribly at the moment and has its own barriers to entry. So TIAA may be OK for TRAD, or AFTRA for some otherw, but I have moved non TRAD investments to broader low-cost brokerages.

I agree with OP that at this point TIAAs mission and product offerings seem a bit adrift, confusing, and expensive. I keep seeing Nuveen popping up in the product, an odd mix of non-profit and a (non-low cost) investment firm.
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Re: Need help on TIAA and Cref

Post by ikowik »

What is AFTRA? A quick Google search did not turn up anything relevant to TIAA
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Re: Need help on TIAA and Cref

Post by crefwatch »

Mike, in general your post is accurate and very helpful, thank you. I want to correct one statement:

[TIAA] Annuity products have built-in mortality expense, even if it is likely you never intend to annuitize.

While this is not literally false, the Mortality Risk charge for CREF Annuities is .005%. Anywhere except Bogleheads, that would be a vanishingly small number! (Ironica Typeface) The reason is that the Mortality Risk for both CREF Annuities and for TIAA Traditional Annuities falls on the Participants. TIAA, the company, bears no part of that risk, and thus does not need to charge for it. (The .005% is for a sort of ancilliary risk, in fact, not the "risk that you will live a long time and bankrupt TIAA!" This is also related to the Unneeded Reserves, which are returned to the Participants, and not to the evil, giant Insurance Company. The term "Loyalty Bonus" is a new name for an old policy.)

This is one of the reasons why TIAA and CREF annuities can be a better deal than those from Vanguard's affiliated companies, or from open-market SPIA companies. YMMV with any given product, of course.

(The internal expenses of TIAA Traditional are hidden inside the "Black Box.")
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Re: Need help on TIAA and Cref

Post by tibbitts »

ikowik wrote: Wed Jun 07, 2023 2:49 pm What is AFTRA? A quick Google search did not turn up anything relevant to TIAA
I don't recall seeing that term used previously on Bogleheads except maybe in a SAG union-related thread, and have no idea.
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Re: Need help on TIAA and Cref

Post by tibbitts »

Mike83 wrote: Wed Jun 07, 2023 2:41 pm TIAA Life Insurance and TIAA Real Estate were gems. They stopped offering Life, and the Real Estate fund is suffering terribly at the moment and has its own barriers to entry. So TIAA may be OK for TRAD, or AFTRA for some otherw, but I have moved non TRAD investments to broader low-cost brokerages.
I can't comment about Life Insurance, but how is Real Estate more or less of a "gem" than before? I've never regarded it as a "gem", but it is somewhat unique, and I've held it in varying amounts for a while. In terms of "suffering terribly", I'm not seeing that in comparison to my domestic and foreign real estate funds, which in the end are sort of unbuffered versions of TIAA's offering, with some equity-like behavior added in. Realistically the restrictions introduced in the aftermath of the GFC don't affect the vast majority of people who hold the fund, and some of them can even be worked around if someone is sufficiently determined. Arguably the restrictions and valuation changes make the fund somewhat more resistant to trading abuses.
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Re: Need help on TIAA and Cref

Post by ResearchMed »

tibbitts wrote: Wed Jun 07, 2023 4:07 pm
ikowik wrote: Wed Jun 07, 2023 2:49 pm What is AFTRA? A quick Google search did not turn up anything relevant to TIAA
I don't recall seeing that term used previously on Bogleheads except maybe in a SAG union-related thread, and have no idea.

Mike83 used it a few times earlier today at: Wed Jun 07, 2023 3:41 pm

I assume they meant ATRA [as used in earlier posts], for "American Taxpayer Relief Act" as well as "After Tax Retirement Annuity".
(Not to mention... "Automatic Transmission Rebuilders Association", "American Therapeutic Recreation Association", etc. :wink: )

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Bennie
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Re: Need help on TIAA and Cref

Post by Bennie »

tibbitts wrote: Tue Jun 06, 2023 11:34 pm I believe the calculations you'll get if you contact TIAA about annuitizing your account will actually represent what you'll receive, and that's what matters more than understanding how TIAA arrived at the amounts. I'm not a TIAA expert but have a third of my retirement assets at TIAA and have no more concerns about TIAA than I do about Vanguard or Fidelity, where I also hold investments. In fact I've moved about 10% of my retirement assets from Vanguard to TIAA.

I haven't annuitized any of my TIAA accumulation, but have that as an option for the future.
Thanks for all the replies from everyone!!!

Maybe I just had a bad rep. What he sent me had 0% inflation as an entry. Many other entires I could not see but sounded wrong also. This is a pre-tax account, so his calculations for my annuity to start at 56 were just as weird as the 0% inflation.

I'll have to read all the lnks - sigh - I am not feeling positive about this. No clarity.
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Bennie
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Re: Need help on TIAA and Cref

Post by Bennie »

Numbers I got from TIAA:
***************************************************************
Income start date: 08/01/2023 (age 56)
Total included balance: 113,545.-
Estimated balance at income start date: 114,467.-

Lifetime annuity

First payment 815.-
from Fixed 815.-
Guaranteed amounts 400.- (what you would always get?)
Additional Amounts 199.- (can change year to year? - what the heck is this?)
Loyalty bonus 217.- (can change year to year ? - what the heck is this?)
from Variable 0.-

Guaranteed Period 0 Years - nothing left to heirs if I die tomorrow - ok
Age at Last Payment Ongoing/Perpetual
******************************************************************
What good is an annuity if I don't know if I will be getting over half of the monthly money after the first year? How is TIAA a good deal? How do you calculate a retirement plan with that? :oops:

I guess they use the 4% rule and then give you extra if the annual investment return percentage rate allows it? So this is a good deal... in a way, since you get the 4% even if the market drops... which is what the 4% rule would also do... but they give you about 8% to start with in this example, so higher percentages for some years... even though it beats me how they come up with that and you would have to use that money as mad-money and only count on the 400.- in this example, right? :shock:

Again, this forum much appreciated!!! :beer
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beernutz
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Re: Need help on TIAA and Cref

Post by beernutz »

Bennie wrote: Thu Jun 08, 2023 5:23 pm Numbers I got from TIAA:
***************************************************************
Income start date: 08/01/2023 (age 56)
Total included balance: 113,545.-
Estimated balance at income start date: 114,467.-

Lifetime annuity

First payment 815.-
from Fixed 815.-
Guaranteed amounts 400.- (what you would always get?)
Additional Amounts 199.- (can change year to year? - what the heck is this?)
Loyalty bonus 217.- (can change year to year ? - what the heck is this?)
from Variable 0.-

Guaranteed Period 0 Years - nothing left to heirs if I die tomorrow - ok
Age at Last Payment Ongoing/Perpetual
******************************************************************
What good is an annuity if I don't know if I will be getting over half of the monthly money after the first year? How is TIAA a good deal? How do you calculate a retirement plan with that? :oops:

I guess they use the 4% rule and then give you extra if the annual investment return percentage rate allows it? So this is a good deal... in a way, since you get the 4% even if the market drops... which is what the 4% rule would also do... but they give you about 8% to start with in this example, so higher percentages for some years... even though it beats me how they come up with that and you would have to use that money as mad-money and only count on the 400.- in this example, right? :shock:

Again, this forum much appreciated!!! :beer
A good place to compare TIAA annuity amounts to what you can purchase as a Single Premium Immediate Annuity (SPIA) is immediateannuities.com. For example your $114k would purchase a lifetime annuity of about $575 a month for a single (no joint life) male in California.

If you are concerned about your beneficiaries not receiving anything if you die while receiving a TIAA annuity you can specify a 10-year certain period so that up to 10 years from the start they'll receive the remaining annuity payments. I believe other periods certain can be specified but 10 years is the default.

I'm not going to pretend to fully understand TIAA's additional and loyalty amounts but there are many threads in the forum which attempt to explain them.

What kind of TIAA account do you have? GSRA, SRA, RA, RC?
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Re: Need help on TIAA and Cref

Post by Bennie »

beernutz wrote: Thu Jun 08, 2023 5:42 pm
A good place to compare TIAA annuity amounts to what you can purchase as a Single Premium Immediate Annuity (SPIA) is immediateannuities.com. For example your $114k would purchase a lifetime annuity of about $575 a month for a single (no joint life) male in California.

If you are concerned about your beneficiaries not receiving anything if you die while receiving a TIAA annuity you can specify a 10-year certain period so that up to 10 years from the start they'll receive the remaining annuity payments. I believe other periods certain can be specified but 10 years is the default.

I'm not going to pretend to fully understand TIAA's additional and loyalty amounts but there are many threads in the forum which attempt to explain them.

What kind of TIAA account do you have? GSRA, SRA, RA, RC?
Thanks, beernutz!

So the 815.- looks better than the 575.- but the 400.- is less than 575.- If 400.- is all I can count on TIAA does not look so good.

I'll try to read up on the other links. I am just a slow reader.
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Re: Need help on TIAA and Cref

Post by Elric »

Bennie wrote: Thu Jun 08, 2023 5:23 pm Numbers I got from TIAA:
***************************************************************
Income start date: 08/01/2023 (age 56)
Total included balance: 113,545.-
Estimated balance at income start date: 114,467.-

Lifetime annuity

First payment 815.-
from Fixed 815.-
Guaranteed amounts 400.- (what you would always get?)
Additional Amounts 199.- (can change year to year? - what the heck is this?)
Loyalty bonus 217.- (can change year to year ? - what the heck is this?)
from Variable 0.-

Guaranteed Period 0 Years - nothing left to heirs if I die tomorrow - ok
Age at Last Payment Ongoing/Perpetual
******************************************************************
What good is an annuity if I don't know if I will be getting over half of the monthly money after the first year? How is TIAA a good deal? How do you calculate a retirement plan with that? :oops:

I guess they use the 4% rule and then give you extra if the annual investment return percentage rate allows it?
While only the guaranteed amount is guaranteed (I know, kind of obvious), The TIAA Traditional fixed annuity has paid more than the guaranteed minimum income payment every year since 1949. In the past 25 years, TIAA has given 15 pay increases. I believe (but am not certain) that there was only one year when they decreased the additional amount from the previous year. Someone else can check me on that.

Annuities, whether TIAA or another SPIA, does not base payouts on the 4% rule. They factor in your age, so the longer you wait to start, the higher your payout per month will be, assuming the amount invested remains constant. Imagine a 95 year old starting an annuity. They would certainly expect (and receive) far more than 4% a year as a guaranteed payout. This is why some here recommend annuitizing a part of your retirement savings in increments as you grow older. It sort of acts like an inflation adjustment, although it's actually just that you're closer to dying. :D

Disclosure: I've had TIAA as part of my retirement plan, and continue to. I rolled over the SRA (immediate full withdrawal available) that was in the CREF stock fund once I retired. I figured there were better index funds to put it in. I just recently annuitized my TIAA traditional that I could have taken out over 10 years. I'm happy with the monthly payments and their track record (even though yes, the past does not guarantee the future). I still have a small amount in their REIT, as in the past it was a good diversifier. Post COVID, it's been hit like other REITs, and I may permanently shift out of it as I continue to simplify and given that commercial real estate may continue to have some serious issues.
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Re: Need help on TIAA and Cref

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Elric wrote: Thu Jun 08, 2023 6:09 pm
While only the guaranteed amount is guaranteed (I know, kind of obvious), The TIAA Traditional fixed annuity has paid more than the guaranteed minimum income payment every year since 1949. In the past 25 years, TIAA has given 15 pay increases. I believe (but am not certain) that there was only one year when they decreased the additional amount from the previous year. Someone else can check me on that.

Annuities, whether TIAA or another SPIA, does not base payouts on the 4% rule. They factor in your age, so the longer you wait to start, the higher your payout per month will be, assuming the amount invested remains constant. Imagine a 95 year old starting an annuity. They would certainly expect (and receive) far more than 4% a year as a guaranteed payout. This is why some here recommend annuitizing a part of your retirement savings in increments as you grow older. It sort of acts like an inflation adjustment, although it's actually just that you're closer to dying. :D

Disclosure: I've had TIAA as part of my retirement plan, and continue to. I rolled over the SRA (immediate full withdrawal available) that was in the CREF stock fund once I retired. I figured there were better index funds to put it in. I just recently annuitized my TIAA traditional that I could have taken out over 10 years. I'm happy with the monthly payments and their track record (even though yes, the past does not guarantee the future). I still have a small amount in their REIT, as in the past it was a good diversifier. Post COVID, it's been hit like other REITs, and I may permanently shift out of it as I continue to simplify and given that commercial real estate may continue to have some serious issues.
Thanks, Elric!

That puts things inperspective for me some. Sure, I know, they do not use the 4% rule for annuities, but it was close in this case and I am just trying to get a feel for how this could compare to me putting the money elsewhere.

Being in the nervous pre-retirement phase, looking to make the jump, my sense of humor about things that may or may not be paid is low at the moment but I see what you are saying.

Phasing annuities is a good idea that I had not thought about. It would be the same as getting an annuity to start at a later age, yes? (delayed annuity) or is it better to just buy the thing later in retirement? What considerations would go into this?
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Re: Need help on TIAA and Cref

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Bennie wrote: Thu Jun 08, 2023 8:23 pm Annuities, whether TIAA or another SPIA, does not base payouts on the 4% rule. They factor in your age, so the longer you wait to start, the higher your payout per month will be, assuming the amount invested remains constant. Imagine a 95 year old starting an annuity. They would certainly expect (and receive) far more than 4% a year as a guaranteed payout. This is why some here recommend annuitizing a part of your retirement savings in increments as you grow older. It sort of acts like an inflation adjustment, although it's actually just that you're closer to dying.

The "sort of inflation adjustment", at least as we intend to do it, isn't because the payout is a higher proportion (usually) when one annuitizes at an older age. It's because we'd be adding an additional small amount of monthly income for life. And depending upon how things go, we might be additing more than one of these little "income bumps" over time.

Also, to clarify at least for TIAA's annuity, last I checked, one could not annuitize beyond age 90. (No idea if that is strictly for TIAA's own policies or if there are any other "rules" or regulations/etc.)

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Re: Need help on TIAA and Cref

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Ok, I don't think anybody commented on the "the annuity can start at 56" part yet. Isn't that impossible? I thought the funds cannot be touched until 59 1/2 years old. Did I miss any comments on that? What are your thoughts?
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Re: Need help on TIAA and Cref

Post by Bennie »

ResearchMed wrote: Thu Jun 08, 2023 8:38 pm

Also, to clarify at least for TIAA's annuity, last I checked, one could not annuitize beyond age 90. (No idea if that is strictly for TIAA's own policies or if there are any other "rules" or regulations/etc.)

RM
You mean you cannot buy an annuity past age 90, right?

If you bought it earlier it should pay out after age 90 until you die, right?

Also, does anyone know if you can get a TIAA annuity with COLA?
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Re: Need help on TIAA and Cref

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Bennie wrote: Thu Jun 08, 2023 8:55 pm
ResearchMed wrote: Thu Jun 08, 2023 8:38 pm

Also, to clarify at least for TIAA's annuity, last I checked, one could not annuitize beyond age 90. (No idea if that is strictly for TIAA's own policies or if there are any other "rules" or regulations/etc.)

RM
You mean you cannot buy an annuity past age 90, right?

If you bought it earlier it should pay out after age 90 until you die, right?

Also, does anyone know if you can get a TIAA annuity with COLA?

Once one has a "life annuity", yes, it continues to pay for life (of one or two annuitants, depending upon how it is set up).

Until a few months ago, TIAA had a "graduated" increasing option, but that's no longer available for anyone getting newly annuitizing, But it wasn't stictly "COLA" adjusted. And it started at a much lower payment than if one had the non-graduated version, so it would take some time to even catch up.

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Re: Need help on TIAA and Cref

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Bennie wrote: Thu Jun 08, 2023 8:55 pm Also, does anyone know if you can get a TIAA annuity with COLA?
I don't think anyone offers an annuity with a COLA anymore. The problem was, to be conservative and protect themselves, the initial payments were so low that there was little market for them.
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Re: Need help on TIAA and Cref

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Bennie wrote: Thu Jun 08, 2023 8:55 pm
Also, does anyone know if you can get a TIAA annuity with COLA?
No, but as far as I know you can no longer buy one from anybody else, either.
Last edited by tibbitts on Fri Jun 09, 2023 8:29 am, edited 1 time in total.
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Re: Need help on TIAA and Cref

Post by Bennie »

Elric wrote: Thu Jun 08, 2023 10:02 pm
I don't think anyone offers an annuity with a COLA anymore. The problem was, to be conservative and protect themselves, the initial payments were so low that there was little market for them.
tibbitts wrote: Thu Jun 08, 2023 10:29 pm
No, but as far as I know you can no longer buy one from a anybody else, either.
Hm. What does this say about annuities? Maybe not such a good idea anymore if the companies can't keep up with inflation or don't want to try to manage them?
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Re: Need help on TIAA and Cref

Post by student »

Bennie wrote: Fri Jun 09, 2023 12:39 am
Elric wrote: Thu Jun 08, 2023 10:02 pm
I don't think anyone offers an annuity with a COLA anymore. The problem was, to be conservative and protect themselves, the initial payments were so low that there was little market for them.
tibbitts wrote: Thu Jun 08, 2023 10:29 pm
No, but as far as I know you can no longer buy one from a anybody else, either.
Hm. What does this say about annuities? Maybe not such a good idea anymore if the companies can't keep up with inflation or don't want to try to manage them?
Or maybe there is no market. I think the difficulty is forecasting inflation. If inflation is known, then the calculation is straightforward. I think an insurance company can probably offer such a product but the initial income for the annuitant will be low enough that it may not get enough business.
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Re: Need help on TIAA and Cref

Post by crefwatch »

Bennie wrote: Thu Jun 08, 2023 5:23 pm Numbers I got from TIAA:
***************************************************************
Income start date: 08/01/2023 (age 56)
Total included balance: 113,545.-

What good is an annuity if I don't know if I will be getting over half of the monthly money after the first year? How is TIAA a good deal? How do you calculate a retirement plan with that? :oops:

I guess they --- --- --- --- and then give you extra if the annual investment return percentage rate allows it? So this is a good deal... in a way, since you get the --- even if the market drops... which is what the --- --- would also do... but they give you about 8% to start with in this example, so higher percentages for some years... even though it beats me how they come up with that and you would have to use that money as mad-money and only count on the 400.- in this example, right? :shock:
Bennie, thanks for coming back and making your needs clearer. I'm afraid I have some tough-love for you.

Once upon a time, someone who spent his adult life screwing on left car-door handles could rely on a substantial, fixed, Defined-Benefit pension payment for the rest of his life. (Gendered pronoun intentional!) That time is over. You are now responsible for your own retirement. You have to read the documents. It's an oversimplification, but one reason Defined-Benefit pensions are gone is that you have the freedom to buy a Chinese-made American Flag magnet to stick on the rear of your rice-burning (... widely used term when I lived in Ohio, near the Lorain assembly plant ... ) luxury SUV.

Congratulations on saving a substantial amount towards your retirement. But unless you live in a very low-cost, rural area, I suspect that $114K does not "entitle" you to retire at 56. Inflation has been a reality in the U.S. at least since 1945. The daily newspaper that cost my father 5 cents in 1960 now costs $4.00. Your demand for a COLA is a demand for a reliable funding source that delivers a big payout with zero risk. No such funding system exists. Did you read about the Teamsters multi-state pension fund that went belly-up? Paying indeterminate volumes of money out over decades is a complex, probabilistic project that requires .... uncertainty.

It is clear that you DO need to annuitize your balance, because you do NOT have enough assets to retire solely on withdrawals from your assets. Annuities do that. At TIAA in fact, people who die sooner SUBSIDIZE those who don't, because their money goes towards other people's retirements, rather than (mostly) executive salaries and shareholders, as they do at regular insurance companies. (So you are NOT "making a bet with an evil Insurance Company", at all!)

Are you aware that you could also take an equity-based annuity from TIAA's CREF arm? But over her retirement, my mother's CREF Stock VA payout ranged from $866 per month to $3,382 per month. You have made it clear that this degree of variability is not acceptable to you. You're entitled to that decision. As a few people have written, it takes a leap of "faith" to believe that TIAA Traditional (inception date 1918) will pay out those Additional Amounts. But they do!

So given that YOUR CHOICE is TIAA Traditional, you should start with this document:
https://www.tiaa.org/public/pdf/TT_FAQ.pdf

As a supplement, with lower detail, see:
https://www.tiaa.org/public/pdf/making- ... rement.pdf

You should seek out older friends from work who have been on TIAA-CREF retirements. Ask them if they got screwed or not.

Think critically about all your income and costs to be expected in retirement. Maybe inflation can be held at bay until you start Social Security. But at what age will you have to do that? What will your benefit be. What will your Medicare premiums be? It's hard work to be responsible for your own retirement.

Edit: Typo
Last edited by crefwatch on Fri Jun 09, 2023 9:04 am, edited 1 time in total.
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Re: Need help on TIAA and Cref

Post by tibbitts »

student wrote: Fri Jun 09, 2023 6:43 am
Bennie wrote: Fri Jun 09, 2023 12:39 am
Elric wrote: Thu Jun 08, 2023 10:02 pm
I don't think anyone offers an annuity with a COLA anymore. The problem was, to be conservative and protect themselves, the initial payments were so low that there was little market for them.
tibbitts wrote: Thu Jun 08, 2023 10:29 pm
No, but as far as I know you can no longer buy one from a anybody else, either.
Hm. What does this say about annuities? Maybe not such a good idea anymore if the companies can't keep up with inflation or don't want to try to manage them?
Or maybe there is no market. I think the difficulty is forecasting inflation. If inflation is known, then the calculation is straightforward. I think an insurance company can probably offer such a product but the initial income for the annuitant will be low enough that it may not get enough business.
I can't explain to the OP why COLA annuities were previously available but aren't now. I don't know if it's matter of low demand, longer lifespans, higher reserve requirements... maybe someone else knows. But many pensions, including public pensions, have either eliminated COLAs, or been those pensions have been eliminated entirely. So it's not a situation unique to annuities. The TIAA graduated payment method was never a true COLA annuity, and I'm not aware of whether it ever offered a true COLA product (even maybe with caps on the COLA.)
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Re: Need help on TIAA and Cref

Post by 22twain »

crefwatch wrote: Fri Jun 09, 2023 8:26 am Congratulations on saving a substantial amount towards your retirement. But unless you live in a very low-cost, rural area, I suspect that $114K does not "entitle" you to retire at 56.
I'm pretty sure I remember reading that Bennie has more assets than the $114k at TIAA, but I can't quickly find a post with more details.
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