TIAA 2024 SP annunity

[FargoI]

Happy New Year's Eve to all.

My long standing though has been to stay away from any retirement annuity including TIAA's. The recent announcement from TIAA that their payout rate for the guaranteed portion of a SP ten year guaranteed starting in Jan 2024 as >8% is intriguing. Payout Rate is a proprietary formula at TIAA.

I am interested in hearing from folks who chose to take a TIAA Lifetime annuity in recent years and in particular 2023 to see if there are any regrets; or if anyone is on the cusp of taking an annuity in 2024. Likewise, I am interested in in hearing from TIAA customers who chose the ten-year Transfer Payout Annuities In lieu of a Lifetime annuities.

Background:
Building on an old post from a member of this community, TIAA's Lifetime annuity was defined as a 'Total' of three parts: "X" = guaranteed portion, "
Y" = a variable portion and "Z" = Loyalty bonus (for eligible TIAA customers).


Understanding the Y and Z components are variable - as they are set at the discretion of TIAA's BOD on an annual basis (~March), the > 8% payout
on the "X" portion is not indicative of the entire picture. And, the TIAA proprietary annuity schema makes it difficult to compare their products to competitors.


Thanks in advance for sharing your insights.

Happy, Health and peaceful New Year.

 

[cyber888]

Happy New Year's Eve to all.

My long standing though has been to stay away from any retirement annuity including TIAA's. The recent announcement from TIAA that their payout rate for the guaranteed portion of a SP ten year guaranteed starting in Jan 2024 as >8% is intriguing. Payout Rate is a proprietary formula at TIAA.

I am interested in hearing from folks who chose to take a TIAA Lifetime annuity in recent years and in particular 2023 to see if there are any regrets; or if anyone is on the cusp of taking an annuity in 2024. Likewise, I am interested in in hearing from TIAA customers who chose the ten-year Transfer Payout Annuities In lieu of a Lifetime annuities.

Background:
Building on an old post from a member of this community, TIAA's Lifetime annuity was defined as a 'Total' of three parts: "X" = guaranteed portion, "
Y" = a variable portion and "Z" = Loyalty bonus (for eligible TIAA customers).


Understanding the Y and Z components are variable - as they are set at the discretion of TIAA's BOD on an annual basis (~March), the > 8% payout
on the "X" portion is not indicative of the entire picture. And, the TIAA proprietary annuity schema makes it difficult to compare their products to competitors.


Thanks in advance for sharing your insights.

Happy, Health and peaceful New Year.

I guess you must be around 66 or 67 years old to get the 8% payout, or Younger but you are trying to get a Single Annuity (your info is lacking). Or you've worked longer than I did and have more bonus

My TIAA Calculation to get an 8% annuity payout as a Joint Annuity with wife, is at 67 years old.

By the way, I just retired this year at 59.5 years old and I took the TIAA fixed Lifetime annuity and got a 7.16% Payout. Rather than wait for 8% at a later age, I'm fine with 7.16% taking it 7.5 years earlier. I'm enjoying that 7.15% Payout rate now. I get it every 1st of the month. For the Jan. 1, 2024 pay, I got it Dec. 30, 2023. And to think I got 7.15% Lifetime payout at 59+ years old is amazing.

 

[TheWizard]

I annuitized a good portion of my TIAA accumulation back in 2013. About 20% was based on TIAA Traditional (what the OP is talking about), another 20% based on CREF Stock, and 60% based on TIAA Real Estate Account.

When annuitizing Trad, you get a higher payout rate (loyalty bonus) the longer you've held it, especially ten years or more.
I've had unscheduled increases in my Trad annuity payout in about half of the past ten years.

There's a PDF file somewhere on the site showing how Trad annuitants make out far better than standard SPIA annuitants at other companies, where their monthly payout amount never changes.

Also, there's a retirement income illustrator tool on the site that gives you accurate personalized estimates of starting monthly income depending on what options you select.

I've been quite pleased with my monthly adjusted TIAA annuity income, which is approximately double my age 70 SS income.
It's a big reason why I have excess income most months and am adding additional funds to my portfolio rather than drawing it down.

So I heartily recommend that you annuitize a PORTION of your TIAA accumulation when you retire...

 

[FargoI]

Thank you, Wizard, and Cyber888 for your input.

Cyber, you are correct, I am. 67. Yes, I I have used TIAA's online (secure site) tools and run various options over the past few years and again in the past week. I will search this site to see if I can locate the comparision you referenced.

TIAA's 8.2 % announcement is located at: https://www.tiaa.org/public/about-tiaa/news-press/press-releases/2023/12-19


Agree, the guaranteed portion is one of three components, and the loyalty bonus is tied to longevity within TIAA's traditional product line and both are variable year to year. While not discussed above, I also understand that selecting a Joint payer or guaranteed payment period of > 10 years (i.e. 15 or 20) will reduce initial and ongoing payments.

While I have been firmly opposed to annuities in the past, I am trying to be more objective and consider (potentially) investing some of our assets into TIAA's Lifetime annuity at the 8+% rate. Operative word, potentially.

Thanks again for sharing.



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[cyber888]

Hey Fargo, no problem.
Thanks for the link. And it does say 8.2% for 67 years old and yes it is a "Single Annuity".
So yes, it is higher because this is only for 1 person. For a 2-person joint-annuity, the payout rate is going to be lower than 8.2%.

Thank you, Wizard, and Cyber888 for your input.

Cyber, you are correct, I am. 67. Yes, I I have used TIAA's online (secure site) tools and run various options over the past few years and again in the past week. I will search this site to see if I can locate the comparision you referenced.

TIAA's 8.2 % announcement is located at: https://www.tiaa.org/public/about-tiaa/news-press/press-releases/2023/12-19


Agree, the guaranteed portion is one of three components, and the loyalty bonus is tied to longevity within TIAA's traditional product line and both are variable year to year. While not discussed above, I also understand that selecting a Joint payer or guaranteed payment period of > 10 years (i.e. 15 or 20) will reduce initial and ongoing payments.

While I have been firmly opposed to annuities in the past, I am trying to be more objective and consider (potentially) investing some of our assets into TIAA's Lifetime annuity at the 8+% rate. Operative word, potentially.

Thanks again for sharing.



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[Phroig]

I don’t know if it matters here, but crediting rates decreased significantly, by 75 basis points, in January.

 

[HarveyS]

While I have been firmly opposed to annuities in the past, ...

Do you know what has changed your mind to consider this?

 

[FargoI]

The 'January 2024 >8% payout rate on guaranteed portion'.

Changed in so far as willing to listen to others including TIAA wealth management personnel with the intent of overcoming my long standing biases.

 

[FargoI]

It will be interesting to see if this impacts the just advertised >8% on SP lifetime ten year annunity.