TIAA Annuitants Who Stayed the Course Enjoy Historic CREF Payment Increases

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Jun 14, 2021, 09:30 ET

NEW YORK, June 14, 2021 /PRNewswire/ -- Patience during the pandemic literally paid off for those who stayed in the equity markets despite the market unsteadiness at the beginning of the crisis.

TIAA annuitants who elected lifetime income from CREF equity strategies saw a year-over-year payment increase of 60% or more from 2020 to 2021, the first time that's happened in the firm's history.

Back in 1952, TIAA created the first variable annuity, the CREF Stock Account, to provide a lifetime income option for our participants, with the opportunity for growth based on the performance of the underlying accounts. Historic growth can be seen in the income change from 2020 to 2021. *Changes reflect 3/31/20 AUVs as recalculated in September 2020. Source: Corporate Actuarial. Past performance does not guarantee future results.

CREF is a low-cost¹ variable annuity account that can help people to and through retirement. When annuitants retire they can turn CREF into lifetime income that suits their needs.

"As part of our mission to create lifelong financial security and confidence, we are thrilled that so many of our participants have been able to benefit from this increase," said Sanjay Gupta, who leads TIAA's Client Solutions and Outcomes group. "A CREF Stock annuitant who received $6,000 a year last year, for example, may now receive approximately $9,600 a year – an incredible increase at any life stage but especially in retirement."

Resilient markets lead to favorable results
Uncertainty over the long-term economic outlook pushed global stock markets to a rapid and steep downturn at the start of the Covid-19 pandemic. But markets rebounded later in the latter half of 2020, delivering between 70% to 90% cumulative returns during that time².

Last year's swing in investment performance highlights the importance of a well-diversified asset allocation strategy that can help give participants the confidence to remain invested in the market, even during times of volatility like the pandemic.

"CREF is fulfilling its goal to help people outpace inflation, have more income and a better retirement," said Dan Keady, TIAA Chief Financial Planning Strategist. "It's more important than ever for investors to diversify their retirement income sources, just as they do their investments. Annuities can provide that income diversity and stability."

About TIAA

With an award-winning³ track record for consistent investment performance, TIAA (TIAA.org) is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.3 trillion in assets under management (as of 3/31/2021⁴) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.

¹CREF Variable Annuities' net expense ratios average 0.28%, less than half the average industry cost (0.81%) for an institutional annuity. Morningstar as of 3/31/2021, based on Group VA Subaccount net expense ratios from 6,147 variable annuities evaluated.

²Performance data from Morningstar

³The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. The Award is based on a review of risk-adjusted performance of 39 companies for 2016, 36 for 2017, 35 for 2018 & 2019, and 30 for 2020. The award pertains only to the TIAA-CREF mutual funds in the mixed-asset category. Certain funds have fee waivers in effect. Without such waivers ratings could be lower. Past performance does not guarantee future results. For current performance, rankings and prospectuses, please visit TIAA.org.

⁴Based on approximately $1.3 trillion of assets under management across Nuveen affiliates and TIAA investment management teams as of 3/31/2021.

You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877-518-9161 or go to www.TIAA.org/prospectuses for current product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing.

Investment, 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.

Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability.

The income payments from the variable annuity accounts vary with current market conditions and are not guaranteed. They will rise or fall based on investment performance. There are risks associated with investing in securities including possible loss of principal. Past performance does not guarantee future results.

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

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SOURCE TIAA