I was misinformed
Recycles dryer sheets
- Joined
- Jun 14, 2015
- Messages
- 106
(There have been a few previous threads on TIAA annuity issues, but I don't
see this explicitly addressed. I expect there are folks on E-R.org with direct
experience of receiving TIAA annuity payments and will really appreciate
comments). Anyways:
I have a supplemental retirement annuity (SRA) account at TIAA
in the accumulation phase and sitting in "TIAA traditional". I am
contemplating now entering the income phase of the annuity.
When I log in and find my estimated payout from a lifetime annuity I get
"Your first estimated payment of $X/Month includes a $Y Loyalty Bonus."
I gather that this is equivalent to a regular SPIA with lifetime fixed monthly payout
of $(X-Y) PLUS a stream of monthly "bonus" payments whose amount starts
at $Y but that will be adjusted up or *down* by TIAA in some completely
opaque way. These bonus amount adjustments are likely to be
frequent throughout my lifetime as market conditions change.
Is this correct?
If long-term interest rates trend downward, then I would expect the "bonus"
to be reduced (with little lag in time.)
Is this correct?
So...if one is anticipating a reduction in interest rates over the next year, let's say,
then it might be better to purchase a regular SPIA that would effectively
"lock" the current high interest rates into the offered fixed payment for my lifetime.
Is this a correct way of looking at this issue?
Again I appreciate comments from anyone who has direct experience or other knowledge to share.
see this explicitly addressed. I expect there are folks on E-R.org with direct
experience of receiving TIAA annuity payments and will really appreciate
comments). Anyways:
I have a supplemental retirement annuity (SRA) account at TIAA
in the accumulation phase and sitting in "TIAA traditional". I am
contemplating now entering the income phase of the annuity.
When I log in and find my estimated payout from a lifetime annuity I get
"Your first estimated payment of $X/Month includes a $Y Loyalty Bonus."
I gather that this is equivalent to a regular SPIA with lifetime fixed monthly payout
of $(X-Y) PLUS a stream of monthly "bonus" payments whose amount starts
at $Y but that will be adjusted up or *down* by TIAA in some completely
opaque way. These bonus amount adjustments are likely to be
frequent throughout my lifetime as market conditions change.
Is this correct?
If long-term interest rates trend downward, then I would expect the "bonus"
to be reduced (with little lag in time.)
Is this correct?
So...if one is anticipating a reduction in interest rates over the next year, let's say,
then it might be better to purchase a regular SPIA that would effectively
"lock" the current high interest rates into the offered fixed payment for my lifetime.
Is this a correct way of looking at this issue?
Again I appreciate comments from anyone who has direct experience or other knowledge to share.