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One gets an income for the rest of his life. That IS guaranteed. It's the amount of that income that is not guaranteed.
There is a minimum that is fixed, and TIAA decides on an annual basis how much over that minimum the investor will receive for that year. It's that minimum that OP is trying to figure out, and he gets different answers from different TIAA reps.
I used to put clients in fixed annuities and I never saw one that worked that way. I'd have to see the contract to believe it. The only varying rate I know of with a fixed annuity is the ROR prior to any annuitization.
I used to put clients in fixed annuities and I never saw one that worked that way. I'd have to see the contract to believe it. The only varying rate I know of with a fixed annuity is the ROR prior to any annuitization.
It would seem TIAA has their own definition of what a fixed annuity is and it varies wildly.
The performance data quoted represents past performance, and is no guarantee of future results. Your returns and the principal value of your investment will fluctuate so that your accumulation units or shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. Performance may reflect waivers or reimbursements of certain expenses. Absent these waivers or reimbursement arrangements, performance results would have been lower. Since Inception performance shown is cumulative for funds that have less than one year of performance history.
TIAA Traditional Annuity and TIAA Stable Return Annuity accumulations are credited with interest based on when contributions and transfers are received, and your performance will reflect your pattern of contributions. The returns shown in the table reasonably represent what an individual making level monthly premiums would have historically earned over the time periods. Returns for different time periods are calculated in two steps: monthly performance returns are calculated from an accumulation created by a series of level monthly premiums over the prior 10 years (or the inception date of the product if later), and those monthly returns are linked together to determine historical performance for each of the return periods shown.
Note, on page 3, it says: "Under most TIAA Traditional Annuity contracts, the minimum guaranteed interest rate during the payout phase is 2.5%. As in the accumulation phase, this guaranteed minimum interest rate may be supplemented by additional amounts declared by the TIAA Board of Trustees on a year-by-year basis."
Note, on page 3, it says: "Under most TIAA Traditional Annuity contracts, the minimum guaranteed interest rate during the payout phase is 2.5%. As in the accumulation phase, this guaranteed minimum interest rate may be supplemented by additional amounts declared by the TIAA Board of Trustees on a year-by-year basis."
It says INTEREST RATE, it does NOT say PAYOUT RATE. It is talking about the ACCUMULATION PHASE, NOT the payout phase.
If TIAA calls something a fixed annuity, that strongly implies that the monthly payments are FIXED. On my TIAA account page it lists my monthly payment for each year, in a column called "Fixed," and the payment for every year, until at least 30 years from now, is $572/month.
Now how can that be interpreted in any way, other than the deal is if I convert my TIAA traditional account to a lifetime payment, I get $572 every month for the rest of my life.
I think maybe the TIAA people I spoke to, and almost everyone who replied here, are all confusing the accumulation phase with its guaranteed interest rate, with the payout phase.
Other than that, I have no other ideas about what could be causing the confusion.
I think my TIAA adviser must have also had the wrong information, because I don't see where he got 4.9% as the guaranteed minimum rate. That makes no sense at all.
Yes, it says "payout phase," but it says "interest rate." That is not the same thing as "payout rate."
Yes, it is very confusing. I do not understand why a customer would care what interest rate the money is getting, since the money would belong to the insurance company. All I would care about is the payout rate, which should remain fixed.
It would seem TIAA has their own definition of what a fixed annuity is and it varies wildly.
Law governs the nature of annuities. Funding options determine the ROR. That is the reason for the apparent variation.
Quote:
The performance data quoted represents past performance, and is no guarantee of future results. Your returns and the principal value of your investment will fluctuate so that your accumulation units or shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. Performance may reflect waivers or reimbursements of certain expenses. Absent these waivers or reimbursement arrangements, performance results would have been lower. Since Inception performance shown is cumulative for funds that have less than one year of performance history.
TIAA Traditional Annuity and TIAA Stable Return Annuity accumulations are credited with interest based on when contributions and transfers are received, and your performance will reflect your pattern of contributions. The returns shown in the table reasonably represent what an individual making level monthly premiums would have historically earned over the time periods. Returns for different time periods are calculated in two steps: monthly performance returns are calculated from an accumulation created by a series of level monthly premiums over the prior 10 years (or the inception date of the product if later), and those monthly returns are linked together to determine historical performance for each of the return periods shown.
What does this "boilerplate" mean to you? These are standard caveats similar to notices that annuities are not covered by FDIC. They cover their b(ases) with full disclosure under the law.
Actually those annuities looked pretty good from their ad pages.
It says INTEREST RATE, it does NOT say PAYOUT RATE. It is talking about the ACCUMULATION PHASE, NOT the payout phase.
GFN, we cannot help you if you don't try to also help yourself. Reread that text. It says "the minimum guaranteed interest rate during the payout phase is 2.5%." Notice "during the payout phase". This is not about the accumulation period then.
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If TIAA calls something a fixed annuity, that strongly implies that the monthly payments are FIXED.
I've already explained to you that "fixed" means it is invested in "fixed assets", not equity assets (stock).
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On my TIAA account page it lists my monthly payment for each year, in a column called "Fixed," and the payment for every year, until at least 30 years from now, is $572/month.
See why it's hard to tell you specifics? Terminology. You say "my monthly payment". Is that your payment TO THEM or the payment of income TO YOU? The terms are commonly "monthly premium" and "monthly benefit amount". Due to terminology problems it is really necessary to either have a copy of your contract or to sit down with a representative and ask specific question and request documentation. And since I cannot do either we struggle.
See why it's hard to tell you specifics? Terminology. You say "my monthly payment". Is that your payment TO THEM or the payment of income TO YOU? The terms are commonly "monthly premium" and "monthly benefit amount". Due to terminology problems it is really necessary to either have a copy of your contract or to sit down with a representative and ask specific question and request documentation. And since I cannot do either we struggle.
Obviously, I was talking about the monthly payment TO me. I have been talking about that all along.
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