I have made a couple of posts the last couple years, and received some very good and helpful responses. I have also read many of your poll results and see that a fair number of you have retired with well over one million dollars, and it is no wonder that you are able to retire. It’s quite an enviable goal, but at times it intimidates those with less and still wanting to live a less stressful and enjoyable life.
At any rate, as I am about to turn 60, I’ve decided effective September 2007 to tap into my TIAA-CREF after putting money into it for more than 30 years as a high school school teacher. Whether I continue to teach part-time or just relax and do volunteer work, I don’t know. However, I am set on September as the time to get my first retirement money.
I’ve read a few complaints about TIAA-CREF, and while most people agree that their service needs some improvement, it is still a rock solid financial institution. As one who is rather (or very) naïve about where to channel money to make it work for me, I usually opt for the less confusing route. As I got into my 50’s, I moved most of my money into the TIAA Traditional annuity, and now have about $700,000 in the annuity. I have another $150,000 in CREF Stock and TIAA Real Estate. I also have about $80,000 in an annuity in Singapore (where I live), and at 62 years of age can either take that money with me if I leave the country for the US, or that annuity company will start giving me a whopping $450/month for 21 years. My US Social Security will be about $320/year at age 62 (according to the estimates). I’m happy though that I will get Medicare. At the moment I have my own private international health insurance, and I’m happy with that, also.
I’ve talked to a couple “Wealth Management Advisors” from TIAA-CREF, and some others. I’ve received some encouragement on annuitizing the $700,000 traditional annuity. The good thing is that 90% of this annuity is after-tax! People will say, however, that when you annuitize, you really do lose control of all your money, and in exchange, you receive a promise you’ll get a steady stream of income for the rest of you life. In my case, I will get about $47,000 per year from the “Standard Traditional Annuity”, and if I do the “Graded” approach, I start with $42,500 per year, and it goes up every year, so that 25 years later it is almost $53,000/year. However, it is estimated that it take about 10 to 13 years for the “graded” to catch up to the “standard” income, and then it surpasses it. Is it worth doing the graded approach?
The rest of my money ($150,000) in the CREF Stock/TIAA Real Estate I would not touch until I was 70, and I even plan on adding to that consistently, but smaller amounts than I am now. That will increase my retirement income by more than $20,000 when I hit 70 years of age.
There is the option of taking the “Transfer Payout Annuity”, in which I can get my $700,000 out through 10 equal yearly payments of about $84,000/year, and then I could re-invest that money. I have been told that I can put no more than $5,000 in a Roth IRA per year, but at the age of 60, maybe that is not the best thing. Having Roth IRA’s at a much younger age is far better. I look for the route that involves less complexity, which is annuitizing the TIAA Traditional and then adding to the other part of my investments until I’m 70. Maybe, however, what I view as complex and confusing really is not.
Do all of you trust an annuity? When you place your trust in receiving a life time annuity but you lose control of all that money, it is a cause for losing a little sleep. I know that TIAA has the highest ratings by Moodys, and other financial accrediting agencies for being rock solid, but I still have my concerns.
If you have any comments about my ideas and suggestions for some of my concerns, it's always appreciated.
Regards,
Rob
At any rate, as I am about to turn 60, I’ve decided effective September 2007 to tap into my TIAA-CREF after putting money into it for more than 30 years as a high school school teacher. Whether I continue to teach part-time or just relax and do volunteer work, I don’t know. However, I am set on September as the time to get my first retirement money.
I’ve read a few complaints about TIAA-CREF, and while most people agree that their service needs some improvement, it is still a rock solid financial institution. As one who is rather (or very) naïve about where to channel money to make it work for me, I usually opt for the less confusing route. As I got into my 50’s, I moved most of my money into the TIAA Traditional annuity, and now have about $700,000 in the annuity. I have another $150,000 in CREF Stock and TIAA Real Estate. I also have about $80,000 in an annuity in Singapore (where I live), and at 62 years of age can either take that money with me if I leave the country for the US, or that annuity company will start giving me a whopping $450/month for 21 years. My US Social Security will be about $320/year at age 62 (according to the estimates). I’m happy though that I will get Medicare. At the moment I have my own private international health insurance, and I’m happy with that, also.
I’ve talked to a couple “Wealth Management Advisors” from TIAA-CREF, and some others. I’ve received some encouragement on annuitizing the $700,000 traditional annuity. The good thing is that 90% of this annuity is after-tax! People will say, however, that when you annuitize, you really do lose control of all your money, and in exchange, you receive a promise you’ll get a steady stream of income for the rest of you life. In my case, I will get about $47,000 per year from the “Standard Traditional Annuity”, and if I do the “Graded” approach, I start with $42,500 per year, and it goes up every year, so that 25 years later it is almost $53,000/year. However, it is estimated that it take about 10 to 13 years for the “graded” to catch up to the “standard” income, and then it surpasses it. Is it worth doing the graded approach?
The rest of my money ($150,000) in the CREF Stock/TIAA Real Estate I would not touch until I was 70, and I even plan on adding to that consistently, but smaller amounts than I am now. That will increase my retirement income by more than $20,000 when I hit 70 years of age.
There is the option of taking the “Transfer Payout Annuity”, in which I can get my $700,000 out through 10 equal yearly payments of about $84,000/year, and then I could re-invest that money. I have been told that I can put no more than $5,000 in a Roth IRA per year, but at the age of 60, maybe that is not the best thing. Having Roth IRA’s at a much younger age is far better. I look for the route that involves less complexity, which is annuitizing the TIAA Traditional and then adding to the other part of my investments until I’m 70. Maybe, however, what I view as complex and confusing really is not.
Do all of you trust an annuity? When you place your trust in receiving a life time annuity but you lose control of all that money, it is a cause for losing a little sleep. I know that TIAA has the highest ratings by Moodys, and other financial accrediting agencies for being rock solid, but I still have my concerns.
If you have any comments about my ideas and suggestions for some of my concerns, it's always appreciated.
Regards,
Rob
