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Seeking Info on TIAA Traditional Withdrawal Options
Old 12-01-2016, 05:12 PM   #1
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Seeking Info on TIAA Traditional Withdrawal Options

DH retired a couple of months ago and we are in the process of consolidating his various 401Ks into IRAs at Fido. His decades old TIAA-CREF account consists of CREF stock which will be rolled over and just under $100K in TIAA Traditional.

We had assumed our only option was to deplete this over the course of 10 years. During a phone conversation yesterday, the rep also advised us we could annuitize this for life at a payout rate of 8.43%. Current interest rate paid is 4.2%. He stated the breakeven point is about 12 years (haven't done the math yet). He also stated that if DH dies before 10 years, his beneficiary would receive the balance in the account.

Is anyone familiar with this account...I am assuming there is only one type of TIAA Traditional, but could be wrong. Their website is sorely lacking in information. The rep is sending us info. We have an appointment at the local office, however, the earliest available is at the end of January! TIA for any info.
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Old 12-01-2016, 05:17 PM   #2
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Check the morningstar forum about TIAA-CREF for more info. Those folks live and breathe this thing.

I own 3 different types of TIAA Traditional, so there must be at least 8 different ways to own it and 8 different ways of withdrawals, etc.

It's not going anywhere, so waiting until January for more info should have no consequences.

But one may (?) be able to buy more of the old 4.2%-paying TIAA with your old CREF stock, so I would not rollover the CREF stock without figuring out what one can do in that regard. Or one might want to use the CREF stock to buy TIAA Real Estate account shares.
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Old 12-01-2016, 06:27 PM   #3
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Thank you. We will definitely hold off doing anything with the CREF stock until we meet with them next January. I'll also check out the Morningstar forum.
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Old 12-02-2016, 12:28 AM   #4
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I have TIAA-Traditional and it's currently paying 4.8% because most of it was purchased in in the late 1980s. I use it as part of my fixed income and just reinvest the interest.

You have lots of income options with TIAA-Traditional.....

There's the 10 year payout annuity if you want to roll it over and you can make systematic withdrawals, just take the interest or annuitize it. The TIAA annuities are pretty good as SPIAs go, but compare with other annuities if you go that route. Personally with bonds looking like they might be a bit of a roller coaster soon I'd just keep the TIAA-Traditional as is.
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Old 12-02-2016, 10:34 AM   #5
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I also have a small TIAA traditional account from the 1980s. It's currently paying out more than 4.4%. In retirement I just draw out the interest every month. Works for me. My advisor reminded me that no where else can I get such a guaranteed rate of return, and to hold onto it with dear life!
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Old 12-02-2016, 03:13 PM   #6
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I looked at the wrong line...the TIAA is paying 4.835% interest, not 4.2% as I thought! The account is pre 1982. DH always kicks himself for being too conservative in his early years with all his investments. The account started at 50/50 contributions sometime in the mid 70s, ending before '82. It's now slightly more than 75% CREF equities, <25% TIAA. He has to do something with it next year as he turns 70.
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Old 12-02-2016, 04:36 PM   #7
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Although 4.835% sounds nice right now, we all paid for that by getting less early on.

I've read a study that showed that TIAA traditional has simply done about as well at a total US bond index fund over the years. That's not bad at all, but no miracle has been performed with TIAA traditional.
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Old 12-02-2016, 05:23 PM   #8
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Quote:
Originally Posted by LOL! View Post
Although 4.835% sounds nice right now, we all paid for that by getting less early on.

I've read a study that showed that TIAA traditional has simply done about as well at a total US bond index fund over the years. That's not bad at all, but no miracle has been performed with TIAA traditional.
This is true, but TIAA-Traditional has a lot less risk. Older accounts (like mine and that of the OP) have a guaranteed minimum annual return of 3% and are currently paying 4.8%. I have always just included it as part of my fixed income portfolio and with the uncertainty around bond funds today i'm glad I have it.
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Old 12-04-2016, 09:22 PM   #9
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I think there is no fixed income investment as attractive as the TIAA traditional that you hold. If you want to cover some of your basic expenses in retirement with an annuity (a good idea I think) then you probably can't do better than converting your TIAA to an annuity --but I would wait until interest rates go up a bit if you can.
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Old 12-05-2016, 06:42 AM   #10
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I am currently doing a 10 year payout annuity from TIAA. My payout annuity pays 4%/year. It started in 2011.
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