I work for a non-profit that utilizes TIAA for our 403(b) TIAA offers an annuity product (they call it a "pension") known as TIAA traditional. Through the contract my work has with them, assets will always grow at a minimum of 3% annually. The interest rate does fluctuate based on current interest rates - holdings currently appreciate at 4.5% but have been as high as 6% in the last couple of years. According to TIAA, long term investors will receive a "bonus" at the time of retirement - as high as a 17% monthly premium.
I am wondering if any retirees invested in TIAA traditional throughout their career and have any regrets, or no regrets? Should I invest I have no plans in investing more than 20% in the product - this would be 100% of my fixed income within my 403(b).
Keep in mind I am a rather conservative investor with a 50/50 allocation. Retirement is about 25-30 years out for me.
Pro's in my opinion:
-Guaranteed growth until retirement
-Guaranteed income in retirement if I choose to annuitize
-Fee free (according to the contract at least -- I'm assuming they make their money by holding onto mine and investing it for themselves?)
Con's in my opinion:
-Guaranteed income payout doesn't seem the greatest: According to their calculator $400 per month invested over 25 years would only return $17,088 annually (I certainly hope that doesn't account for inflation!) - and I'm assuming that doesn't take into account I'd opt for a survivor's benefit option
-Illiquid: I can withdraw my money fee-free while in the accumulation phase, but only over 120 monthly installments (yes, 120 monthly installments)
Thank you for your feedback?
I am wondering if any retirees invested in TIAA traditional throughout their career and have any regrets, or no regrets? Should I invest I have no plans in investing more than 20% in the product - this would be 100% of my fixed income within my 403(b).
Keep in mind I am a rather conservative investor with a 50/50 allocation. Retirement is about 25-30 years out for me.
Pro's in my opinion:
-Guaranteed growth until retirement
-Guaranteed income in retirement if I choose to annuitize
-Fee free (according to the contract at least -- I'm assuming they make their money by holding onto mine and investing it for themselves?)
Con's in my opinion:
-Guaranteed income payout doesn't seem the greatest: According to their calculator $400 per month invested over 25 years would only return $17,088 annually (I certainly hope that doesn't account for inflation!) - and I'm assuming that doesn't take into account I'd opt for a survivor's benefit option
-Illiquid: I can withdraw my money fee-free while in the accumulation phase, but only over 120 monthly installments (yes, 120 monthly installments)
Thank you for your feedback?
Statistics: Posted by ultrastar — Mon Jan 20, 2025 2:14 pm — Replies 10 — Views 469