Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-16-2013, 10:55 AM   #21
Recycles dryer sheets
 
Join Date: Nov 2011
Location: Oak Ridge
Posts: 52
I will repeat somewhat more strongly: I think the OP is mistaken that he can get 4.338 percent from a TIAA retirement annuity on money contributed to it this year. I'm pretty sure that new money gets only 3 percent this year.
__________________

__________________
MikeTN is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-16-2013, 01:55 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,446
Quote:
Originally Posted by ERD50 View Post
OK, but then the surrender charge would need to be factored into the calculation.

Looking at your second paragraph - how the heck would anyone evaluate this? It's a moving target.

-ERD50
Yes, it is a moving target - welcome to the world of deferred annuities. Typically, the insurer will declare a crediting rate for the coming year for deferred annuities that have their anniversary in the coming month. Setting the crediting rate is a delicate balancing act of keeping the rate competitive so the money doesn't run out the door (especially money that isn't subject to surrender charges) and maintaining/improving profitability.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 07-16-2013, 01:58 PM   #23
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by MikeTN View Post
I will repeat somewhat more strongly: I think the OP is mistaken that he can get 4.338 percent from a TIAA retirement annuity on money contributed to it this year. I'm pretty sure that new money gets only 3 percent this year.
3% is the minimum.....there is an additional credit of 1.387% above that this year for accumulations.

TIAA uses a whole different set of interest rates for the payout calculations. I have just looked at turning my TIAA-Traditional account into an annuity and the quote I got was for a minimum 7.14% payout rate for a single life annuity starting at age 55. About 50% of my account amount gets a 7.75% payout interest rate as the contributions were made before 1992 and the rest has various rates down to 3%. This seems like a good option to provide some guaranteed income.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 07-16-2013, 03:09 PM   #24
Thinks s/he gets paid by the post
veremchuka's Avatar
 
Join Date: Oct 2010
Location: irradiated - too close to the nuclear furnace
Posts: 1,294
No.

4.3% looks good today based upon the past few years, what about 5 or 10 years from now? Inflation may be higher than 4.3%.
__________________
veremchuka is offline   Reply With Quote
Old 07-16-2013, 03:22 PM   #25
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by veremchuka View Post
No.

4.3% looks good today based upon the past few years, what about 5 or 10 years from now? Inflation may be higher than 4.3%.
But it might not be.....and what about getting 7.75% interest rate (not payout rate) on a lifetime annuity for a 55 year old male.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 07-17-2013, 02:10 PM   #26
Thinks s/he gets paid by the post
veremchuka's Avatar
 
Join Date: Oct 2010
Location: irradiated - too close to the nuclear furnace
Posts: 1,294
Sorry I may have not understood (wasn't there a link? I did not read the link.) If it is fixed for life that's what I was replying to. I'm not a fan of annuities but I have a pension and SS, well at least for now.
__________________
veremchuka is offline   Reply With Quote
Still not convinced
Old 07-19-2013, 12:57 PM   #27
Recycles dryer sheets
 
Join Date: Nov 2011
Location: Oak Ridge
Posts: 52
Still not convinced

Op says he can get 3 percent basic interest plus 1.338 percent additional amount from new money in a TIAA retirement annuity.

The reason I think he is mistaken is because I have 2 TIAA annuity accounts and both show only the 3 percent, no additional amounts for new money but there is additional amount for old money.

Perhaps one of us should call TIAA to see who is correct -- I hope he is but I doubt it.
__________________
MikeTN is offline   Reply With Quote
Old 07-20-2013, 07:10 AM   #28
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,836
Quote:
Originally Posted by MikeTN View Post
Op says he can get 3 percent basic interest plus 1.338 percent additional amount from new money in a TIAA retirement annuity.

The reason I think he is mistaken is because I have 2 TIAA annuity accounts and both show only the 3 percent, no additional amounts for new money but there is additional amount for old money.

Perhaps one of us should call TIAA to see who is correct -- I hope he is but I doubt it.
I did check with TIAA. My accumulation rate for the current vintage is 4.387% made up of 3% guaranteed rate and an additional rate of 1.387%.

The payout interest rates are different, but range from 3% for current vintages up to 7.75% for pre 1992 contributions. As I have a lot of pre 1992 contributions when I do the single life annuity calculation for a 55 year old male I get a payout rate of 7.14%. I am getting a detailed quote from TIAA to see the life expectancy and payout interest rates they actually use.
__________________

__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:52 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.