TIAA Traditional Offers Highest New Money Payout Rate in More Than 20 Years

NEW YORK, Dec. 19, 2023 /PRNewswire/ -- Participants electing lifetime income from TIAA Traditional, TIAA's flagship annuity, in January 2024 will receive a historically high payout rate of 8.2%.

"When you convert your savings into lifetime income with TIAA Traditional, you get a guarantee that you'll have money coming in for life no matter how long you live," said Colbert Narcisse, chief product and business development officer at TIAA. "For income starting in January, the payout rate is 8.2%ⁱ – more than double 'the 4% rule' – and is even higher if you have long-term savings in TIAA Traditional that you convert for lifetime income.ⁱⁱ That's thanks to TIAA's Loyalty Bonus—yet another way TIAA shares profits—offering the opportunity for more income the longer you've saved with TIAA Traditionalⁱⁱⁱ."

The TIAA Traditional fixed annuity has paid more than the guaranteed minimum income payment every year since 1949. And in the past 30 years, TIAA has given 19 pay increases to existing annuitants.

TIAA is able to provide these strong annuity payouts due in part to TIAA's company structure that seeks to share profits^iv with participants. TIAA is one of only three insurance groups in the U.S. to currently hold the highest possible ratings from three of the four leading independent rating agencies for its stability, claims-paying ability, and overall financial strength.^v

TIAA Traditional offers clients the security of knowing their retirement savings are protected and guaranteed to increase every single day during accumulation, even in the most volatile markets.  

At retirement, clients have the opportunity, but not the obligation, to turn savings into guaranteed income that lasts for life to help cover everyday living expenses. Those who consistently contributed to TIAA Traditional throughout their careers have seen 20% higher lifetime income payments on average (versus those who transferred in equal savings amounts shortly before selecting lifetime income). ^vi

TIAA Traditional plays a vital role in a diversified income strategy that includes Social Security and income from variable investments and offers the peace of mind that comes with guaranteed income for life.

In addition, TIAA's disciplined risk-management process is designed with a long-term investing approach to ensure that the TIAA General Account can provide the stability and liquidity needed to support the product's guarantees through periods of market stress.

About TIAA

TIAA is a leading provider of secure retirements and outcome-focused investment solutions to millions of people and thousands of institutions. It is the #1 not-for-profit retirement market provider^vii, paid more than $5.6 billion in lifetime income to retired clients in 2022 and has $1.3 trillion in assets under management (as of 6/30/2023)^viii.

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­­­­ⁱ Life annuity payments assume a single life annuity with a 10-year guarantee period at age 67 using TIAA's standard payment method beginning income on January 1, 2024.

ⁱⁱ Converting some or all of your savings to income benefits (referred to as "annuitization") is a permanent decision. Once income benefit payments have begun, you are unable to change to another option.

ⁱⁱⁱ TIAA may provide a Loyalty Bonus that is only available when electing lifetime income. The amount of the bonus is discretionary and determined annually.

^iv TIAA may share profits with TIAA Traditional Annuity owners through declared additional amounts of interest during accumulation, higher initial annuity income, and through further increases in annuity income benefits during retirement. These additional amounts are not guaranteed beyond the period for which they were declared.

^v For its stability, claims-paying ability and overall financial strength, Teachers Insurance and Annuity Association of America (TIAA) is a member of one of only three insurance groups in the United States to currently hold the highest rating available to U.S. insurers from three of the four leading insurance company rating agencies: A.M. Best (A++ as of 7/23), Fitch (AAA as of 8/23) and Standard & Poor's (AA+ as of 9/23), and the second highest possible rating from Moody's Investors Service (Aa1 as of 9/23). There is no guarantee that current ratings will be maintained. The financial strength ratings represent a company's ability to meet policyholders' obligations and do not apply to variable annuities or any other product or service not fully backed by TIAA's claims-paying ability. The ratings also do not apply to the safety or the performance of the variable accounts, which will fluctuate in value.

^vi Based on an analysis of income benefits available to participants who have consistently contributed to TIAA Traditional, relative to participants who converted the same accumulated balance into Traditional just before converting to lifetime income. Assumes a participant aged 65, joint life income option election, and average payment differentials over the last three calendar years ending 12/31/22.

^vii As of July 21, 2022. Based on data in PLANSPONSOR's 403(b) 2022 DC Recordkeeping Survey, combined 457 and 403(b) data.

^viii As of June 30, 2023 assets under management across Nuveen Investments affiliates and TIAA investment management teams are $1,284 billion.

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.

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.

Annuity contracts may contain terms for keeping them in force. For full details, including costs, call us at (800) 842-2252.

TIAA Traditional is a fixed annuity product issued through these contracts by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY, 10017: Form series including but not limited to: 1000.24; G-1000.4; IGRS-01-84-ACC; IGRSP-01-84-ACC; 6008.8. Not all contracts are available in all states or currently issued.

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

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SOURCE TIAA