Does anyone have experience with this option? Is there a maximum age you can execute this? The reason I am asking is that I am hesitant to commit to a fix life time annuity now with the DOW down 5,000 points since the start of the war. I understand you can withdraw up to 7 percent with this option for non-tiaa traditional. Just wanted to get a perspective before i speak with a TIAA WMA. I appreciate the insight.
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@1ra mine was a a 401k through the lab. I did earn between 2 and 5% depending on the contract from 1992 until this year. I don't know where you bank, but that's T bills returns or worse. Given the money was locked up until I retired, you'd think the return would be better. I did rollover every dime I was allowed to after I retired to Vanguard. Still was left with a couple hundred k stuck at TIAA.
@1r8 You mention the 401k, but you also seem to be talking about the TIAA Retirement Plan (employer contributions). The TIAA Retirement plan does not allow a 10 year cash or rollover payout, including for TIAA Traditional. Passbook savings accounts pay less than 1/2 of 1%. TIAA Traditional is clearly paying you more than that. If you're only referring to the 401k, those funds are liquid and you can remove them 100%. No 10 year payout needed.
@OP I actually took a 10 year distribution starting this year. It was in response to the fact that after 30+ years of 10% of my investments in the company's 401k being required to go to TIAA, and TIAA returning passbook savings rates, I could not withdraw the entire sum at retirement. And the lifetime annuity, per month, was a lower return than if you bought a 30 yr mortgage with the money.
The 10 year payout has a higher monthly payment and is guaranteed. And it gets the money out of the TIAA bloodsuckers' hands as quick as possible. Could not be less than 10 years though. And they get to continue paying passbook savings rates on the balances during the 10 years while still controlling how the money is used.
They should be sued. Oh, wait....
TIAAs restrictions on OUR own retirement plan absolutely SU.CKS ! It is BS that we have to get locked into such a coc.kamany restrictive plan. Is T. Brown Duckett locked her her 409A, 457F, and 457B over the course of many years when they are worth millions ? i doubt not. huge double standard.
@11e For the company Retirement Plan: 7% of variable investments (LPWO) is available when separated from the company, but only available in the age range of 55 to RMD age. At RMD age, must switch to recurring RMD payments or lifetime income.
@ar if you do 7 percent a year is that for life?
"TIAA does not sell to participants" - please review the 97 Million settlement that says otherwise.
You have not addressed any of my points on this post. You seem emotional and incoherent. Get your meds adjusted.
@kr I’m sure you a great service rep in the NCC, share your inexperienced take with your manager and their manager. I think you’ll be the one taking two weeks. TIAA doesn’t sell to participants. You are clearly unaware of many things to include the billions that roll out of retirement plans to purchase retail annuities loaded with fees and commissions. They want and need the income and we deliver it and ultra low costs. I don’t have the time to unpack all your misunderstandings and narrow view. You must have gone to Harvard knowing inflation is more than 1%. Warren Buffet over here.
1% non guaranteed increases on average aren't going to keep pace with inflation.......will I be losing if inflation is 3% annually and I am making 1% (non-guaranteed) for the 20 years I have this income stream?
The goal of financial planning should NOT be sell an annuity to your client......especially well funded clients with children.
TIAA is not first and foremost an annuity company. Lifetime income is simply an income option and truthfully if you are well funded for retirement it is unlikely you should annuitize.
I have some kool-aid out back for you to drink my man. I hope you are not client facing - you are a walking talking red flag. TIAA will face serious lawsuits by hiring dopes like yourself. Take 2 weeks off and then quit.
@k7 why offer annuities? TIAA is an annuity company. Moodys will adjust the rating after the acquisition. Other agencies did not share in those findings. Nobody in the org is compensated to compel someone to use the guaranteed income made available to them. Nothing can solve for a participant who did not save adequately not even a passive index fund. Loyalty bonus is legit. If you can’t wrap your head around the benefits of guaranteed income then you are a tu-d in the punch bowl. Go work for Vanguard. Don’t be a sneaky internal saboteur if you don’t share in the orgs financial planning approach thesis. Payout increases happen most years to the tune of 1% average. Pensions and pension like income to solve for a portion of your retirement income needs is great for those who saved during their career.
Its not that all the cool kids think annuities are bad but the decision to annuitize has to be a very thoughtful decision because the decision is irrevocable and cannot be reversed.
The client is giving up control of what they annuitize and for the rest of their life they are tethered to TIAA. If TIAA (or any other company offering annuity income) ceases to exist then your annuity income ceases to exist. You need to think long and hard about any company you annuitize with and what their future trajectory looks like. TIAA's debt was just downgraded after the Schroeders purchase. How will this impact future non-guaranteed COLA increases for annuity payouts that are revalued annually on the fixed annuties? How does it impact the payout rates?, the stupid loyalty bonus concept?
Lifetime Income from a pre-tax retirement account provides fully taxable income. It is not uncommon when one is subject to RMD, Social Security and now a fully taxable annuity income stream. What if the annuity now subjects me to higher Medicare surcharges? What if the lifetime income subjects me to the Net Income Investment Tax? Will the advisor, FC or registered rep I speak to know what this concept even is and will they ensure I am not subject to these extra taxes? It seems like they are only telling me I should just do it because the payout is so great even though the payout includes my return of principal to me over time. What is the opportunity cost I am giving up to have control of this money to invest as I please? Is my non-fiduciary wealth advisor going to work through that with me thoughtfully?
Remember TIAA employees were compensated to push lifetime annuities because of how profitable it was for the company. TIAA still tracks this metric for its advisors today however no longer provides direct compensation for it. Why not?
The website now feels like a commercial for the lifetime income decision - why is that?
Traditional offers an attractive payout and is very stable. It makes total sense to have the income solve for some fixed costs in retirement. If you don’t think institutional annuities don’t do a good job (they do) a providing predictable income in retirement then why work for TIAA. If you have experience and financial planning acumen stop spouting the cool kids propaganda all annuities and all guaranteed income is bad. You know what a 65 year old going into retirement wants? Some guarantees and ballast to their portfolio.
@f0 This again? If someone says you can withdraw the full Retirement Plan balance at RMD age, ask to speak to their manager. The only time you can take the full balance is if the total Retirement Plan accumulation is less than $7,000.
The window for this is 55-March 1 of the year you reach RMD age. You can withdraw up to 7% of VARIABLE funds every year.
@eq did they mention that once you hit RMD age that you have the option of taking the entire balance out (with tax implications, obviously) or you still had to slow roll as an RMD? Only ask bc every time I call, I get conflicting information from the associate I talk to.
@av thank you AR. I executed the limited periodic withdrawal option yesterday. Yes i enabled the 7 percent per year option as a former employee. You were correct in that this can be applied to non tiaa traditional money. This can be in play until a person reaches RMD age. Let me say that the people on the phone were very helpful as I organized my questions. They posted the forms online and we completed all the notary requirements. All documentation was completed online. This is the second positive experience I have had with these people with the first being when I moved over my 401K without incident. I cant speak to the experience that others have had but mine was painless
Why would I give up control of my retirement assets by annuitizing with a company that after 108 years has no idea who they are and is hemorrhaging assets to competitors?
This may be the worst place to post questions on what to do with your TIAA retirement plan money as most of the posters here are haters. You’d be better off going to the vanguard chat board where you’ll find smart people with no axe to grind. Or ask some of you old friends at the company if there is someone at TIAA you can trust with questions like this.
Good point. You should still never annuitize under any circumstance.
@ar There is a maximum age. It is not allowed after the participant reaches RMD age; they then must convert to RMD payments or lifetime income.
Why would you speak to a WMA about your options? Most WMAs have no employee authorizations.
If you are 55 or older and separated form service start rolling the 7% out annually ASAP to an IRA or your GSRA. Never annuitize it if you die with a balance your spouse or your named beneficiaries can opt out of the liquidity restrictions.
There is no maximum age there is only a minimum age. You must be 55 (and retired from TIAA).