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I called TIAA back and got a different person. Would not let him BS me. Finally he said the starting rate (currently 6.18%) for lifetime income is guaranteed. NOT just 2.5%, which is what this guy and the one I spoke to earlier told me. Furthermore, the rate can increase, although it can't decrease.
Supposedly I will get a letter saying this in a couple of weeks.
I think maybe they will BS anyone who does not get angry.
Please don't delete, this is important information for any retiree who has or might get a TIAA account.
It seems like your anger has gotten in the way of clarity. Or at least I am confused and cannot understand what information you are trying to convey.
The TIAA traditional and annuity payout options can be confusing. In addition, TIAA has guarantees on accrual interest during the accumulation phase. I would recommend having a sit down meeting with an advisor to review the details.
Glad you got some satisfaction. As with most telephone support, (or as Clark Howard says, "customer no-service"), the competency of the person on the other line vary greatly. It is often worthwhile to call back at a different time and hopefully speak to a different person.
It seems like your anger has gotten in the way of clarity. Or at least I am confused and cannot understand what information you are trying to convey.
The TIAA traditional and annuity payout options can be confusing. In addition, TIAA has guarantees on accrual interest during the accumulation phase. I would recommend having a sit down meeting with an advisor to review the details.
The website said the initial payout rate if I started in January 2017 would be 6.18%, or $572/month. I asked if that is a lifetime guaranteed payout rate, and the first guy said no, only 2.5% is guaranteed, and the rest is added on. He said the added on amount can change every year, and is voted on by the board of trustees.
The guaranteed interest on the TIAA traditional account is 3%. But the guaranteed payout once you start getting monthly payments is only 2.5%, according to the first guy.
I explained the whole thing to the second guy, and he said the 6.18% rate is guaranteed for life. Then I told him what the first guy said, and he went and asked someone, and came back and agreed with the first guy.
I explained to him, over and over and over, that the website says $572 is a fixed monthly payout. What could "fixed" possibly mean if it is not fixed??
He kept repeating that only 2.5% is guaranteed. I think he thought 2.5% would be $572/month, even though I told him over and over it is much less.
He told me to get a calculator and multiply $111k (approx) by .0618, and sure enough it's $572. I told him yes of course I know, and I explained to him again that 2.5% would be much lower.
I asked to speak to a supervisor. He went and looked but couldn't find one.
However, by that time he had decided that I would get $572/month guaranteed for life. I asked why he changed his mind, but he could not explain.
I asked for a signed letter, and he promised to send one.
I forgot to ask his name, can't believe I was that stupid.
So as to give some background on this thread, I posted earlier today in a new thread explaining in depth my dissatisfaction about some telephone support I received from TIAA. I was upset at the time and wrote my post in such a manner that it was against the TOS.
I am trying to be calmer now and just state what happened.
Hopefully, I got better results from the second representative I spoke with today. Boy, what an ordeal though! Fortunately I am retired and can afford to waste hours of time with phone reps! (But I would rather not waste all that time anyway).
> The website said the initial payout rate if I started in January 2017 would be 6.18%, or $572/month. I asked if that is a lifetime guaranteed payout rate, and the first guy said no, only 2.5% is guaranteed, and the rest is added on.
I think you were confused, or maybe he got confused. I suspect both numbers were right.
2.5% sounds like a correct number for the guaranteed growth rate for a balance that has not been annuitized yet. That guaranteed rate depends on when the money was deposited (TIAA talks about "vintages".). TIAA may declare additional dividends but the vintage rate is guaranteed.
6.2% sounds like a plausible number for a lifetime annuity for a person around 65 years old. If you choose to take your funds as a lifetime annuity the payout rate is guaranteed for life.
Asking and answering questions can be a bit of an art, and maybe one or the other person was not good at it.
Telephone promises and explanations are worth absolutely nothing. They have zero legal culpability, and even a "signed letter" means nothing. Signed by whom? A contract is all that matters. I'll believe it when I see the contract, where an insurance company will pay a guaranteed minimum of 6.18% today (that only goes up, and not down) a year for life for an annuity.
So as to give some background on this thread, I posted earlier today in a new thread explaining in depth my dissatisfaction about some telephone support I received from TIAA. I was upset at the time and wrote my post in such a manner that it was against the TOS.
I am trying to be calmer now and just state what happened.
Hopefully, I got better results from the second representative I spoke with today. Boy, what an ordeal though! Fortunately I am retired and can afford to waste hours of time with phone reps! (But I would rather not waste all that time anyway).
Try reading the wealth of investment books that are available while on hold. Might make you hang up.
Telephone promises and explanations are worth absolutely nothing. They have zero legal culpability, and even a "signed letter" means nothing. Signed by whom? A contract is all that matters. I'll believe it when I see the contract, where an insurance company will pay a guaranteed minimum of 6.18% today (that only goes up, and not down) a year for life for an annuity.
The 6.18% is the rate of withdrawal, not interest. When I annuitized $10,000 of my TIAA account back in 2008 my rate of withdrawal was about 7.1%. It has since increased to 7.44 %.
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