TIAA: Help with Payout Options

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DRGPS51
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TIAA: Help with Payout Options

Post by DRGPS51 » Tue Sep 11, 2018 1:29 am

I have a small annuity ($55k) split between Traditional and variable. I'm 66, still working as a consultant part-time, and married with 3 adult kids. My husband works full-time. I took SS at 62 and my husband is waiting until 70 to take his. Combined, we'll have $60k annually. Other than that, we have $600k equity in our house and $350k in IRAs at Vanguard. Putting kids through college and a few financial setbacks derailed retirement savings, which is why we will continue working as long as we can. We are generally healthy--my husband is a cancer survivor and I have no health issues, other than a blood clot this past year.

I now need to decide how to take my TIAA payout--lifetime or 10 payments over 9 years. Initially, I was going to do a single life with a 10 year guarantee, but then we decided a single life with a 20 year guarantee made sense. The difference is $302 vs. $328/month. Now I'm wondering if a joint life with no guarantee is better. Every time I call TIAA, I get a new consultant and the info seems to change every time. It's confusing. I was asked if I wanted to keep a portion of the money ($15k) variable in CREF stock or roll it into Traditional. I have no idea what's best.

Based on what I've said, I'd appreciate any advice you can give me, so that I can fill out the paperwork and move forward. Many thanks in advance.

aristotelian
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Re: TIAA: Help with Payout Options

Post by aristotelian » Tue Sep 11, 2018 6:32 am

I am curious as I am in accumlation phase with a TIAA plan. I have not really thought through the options. I am inclined to take the 10 year payout and gradually roll over the funds to Vanguard.

For Traditional, I would be inlined to take joint life. I would hate to die early and leave all that money on the table. However, that might be different if your spouse is provided for. However, I could also imagine letting it sit earning 4% while gradually liquidating it.

For the variable, am I correct that you have not actually annuitized yet, so you could cash it out and roll it into an IRA? Or could you use it to add to your Traditional?

A lot depends on your other investments and the role you want this money to play in your portfolio.

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nisiprius
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Re: TIAA: Help with Payout Options

Post by nisiprius » Tue Sep 11, 2018 6:58 am

I've used a 10-payment option when I basically wanted to get out of a TIAA Traditional annuity, and that was the fastest way to do it.

One choice you didn't mention on the lifetime option is level payout or graded payout. I hate that "graded payout" is so indefinite with how fast the payouts increase, but I opted for graded payout because I thought it was absolutely essential to have a growing payout so that we would not be fully exposed to inflation.

With regard to the guarantee period, sometimes called "term certain," there are a couple of considerations. As best I've ever been able to tell, different guarantee periods give you the same "money's worth." It's not a case where one is much better or worse than another.

One issue with tax-advantaged accounts is the possibility that your children will inherit them. An "inherited IRA" is a mess. The whole idea of RMDs is that the IRS wants a statistical chance at getting all of the taxes paid, and accepts that the taxes you pay on annuity payouts will do that. When kids inherit an IRA or 401(k) or 403(b), there are tax rules and hoops to jump through and forms to be filed by deadline, with a hefty penalty if it's not done. This is an honest-to-gosh "consult a tax professional" situation, and it needs to be done at time when coping with it is the last thing they want to do. You want to be sure that they will be getting enough to make it worth the hassle! I would be leery of a long guarantee period (i.e. payments might continue to your kids if you don't live out the full period). I may be putting too much weight on the "hassle" factor, but it's just something you should be aware of.

I personally like life annuities (TIAA lifetime payout contracts) and SPIAs. People who hate all annuities complain that much of what you receive is just the insurance company paying your own money back to you, which is true but irrelevant (beyond understanding that the payout rate is not like an "interest rate.") A reason why annuities are good is the existence of "mortality credits." The higher payout for people who need income for a long time is financed by the payouts that are not made to people who live a short time. The risk that you might receive a small number of payments is what makes it possible to finance the possibility that you might live long and need a large number of payments.

Now, during the guarantee period, you are not taking that risk, and you are not receiving any mortality credits. For the guarantee period, the insurance company really is just paying your own money back to you. That isn't necessarily a bad thing. Furthermore, what the small difference in payouts for the 10- and 20-year period is telling you is that it really is quite likely that you are going to live 20 years. You can think about this either way, but one way to think about it is that although you could lose ten years' of payouts if you don't elect the 20-year guarantee, it's not very likely to happen.
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Timoneer
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Re: TIAA: Help with Payout Options

Post by Timoneer » Tue Sep 11, 2018 9:00 am

DRGPS51 wrote:
Tue Sep 11, 2018 1:29 am
I have a small annuity ($55k) split between Traditional and variable. I'm 66, still working as a consultant part-time, and married with 3 adult kids. My husband works full-time.
...I now need to decide how to take my TIAA payout--lifetime or 10 payments over 9 years...
Why do you need to decide now? With both of you still working, presumably you do not need the extra income at the moment.

Four or five years from now when you must start RMD's is the real decision deadline, and you will have additional options. One is taking RMD's only (TIAA calls it MDO). There is also an interest only option. Or by delaying any annuitization, the eventual payout will increase.

Personally, I would not do the 9 year payout on the $40K in TIAA Traditional fund. It is an excellent part of your fixed income allocation that can not be matched by anything at Vanguard. As for the other $15K in Cref, either leave it alone for now, as a more 'liquid' portion of your TIAA account, or roll it over to Vanguard.

grok87
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Re: TIAA: Help with Payout Options

Post by grok87 » Tue Sep 11, 2018 9:44 am

Anybody taking variable payout annuity from the tiaa real estate annuity? I’m considering that
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jjustice
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Re: TIAA: Help with Payout Options

Post by jjustice » Tue Sep 11, 2018 1:48 pm

I began my TIAA annuities in the summer of 2013. I have annuities from CREF Stock, TIAA Real Estate, and TIAA Traditional (both standard and graded method). I preferred graded method because I like to have an increasing income, but not all of my vintages (i.e. contributions made at different times) were earning the minimum of 4% that is required for graded method. I have a standard payout annuity for the small amount that did not qualify for graded payout.

I am very happy with all my annuities and would not do anything differently. My annuities altogether are paying 25.09% more than they did when I started 5 years ago. (Total inflation has been 8% for the same period.)

I did not want a guarantee period because I did not think that the possibility of a few years of continued annuity payments was of much value to my heirs. I made other arrangements for them.

It is difficult to choose among all the options, but there is a chart on page 11 of the brochure below that will allow you to see what difference each possible combination makes.

https://www.tiaa.org/public/pdf/pubs/pd ... income.pdf

John

DRGPS51
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Re: TIAA: Help with Payout Options

Post by DRGPS51 » Tue Sep 11, 2018 8:36 pm

aristotelian wrote:
Tue Sep 11, 2018 6:32 am

For the variable, am I correct that you have not actually annuitized yet, so you could cash it out and roll it into an IRA? Or could you use it to add to your Traditional?
A TIAA consultant went ahead--without my understanding or approval--and annuitized the $15k portion invested in Vanguard, but kept it "variable" in CREF stock. I think when I'm ready to start taking the payout, I'll probably roll it into Traditional. The whole process has been confusing and dealing with various TIAA consultants, some of whom are knowledgeable and some not-so-much, has put me in a kind of limbo not knowing what to do. The advice I'm getting here is priceless.

DRGPS51
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Re: TIAA: Help with Payout Options

Post by DRGPS51 » Tue Sep 11, 2018 8:52 pm

nisiprius wrote:
Tue Sep 11, 2018 6:58 am
I've used a 10-payment option when I basically wanted to get out of a TIAA Traditional annuity, and that was the fastest way to do it.

One choice you didn't mention on the lifetime option is level payout or graded payout. I hate that "graded payout" is so indefinite with how fast the payouts increase, but I opted for graded payout because I thought it was absolutely essential to have a growing payout so that we would not be fully exposed to inflation.

With regard to the guarantee period, sometimes called "term certain," there are a couple of considerations. As best I've ever been able to tell, different guarantee periods give you the same "money's worth." It's not a case where one is much better or worse than another.

One issue with tax-advantaged accounts is the possibility that your children will inherit them. An "inherited IRA" is a mess. The whole idea of RMDs is that the IRS wants a statistical chance at getting all of the taxes paid, and accepts that the taxes you pay on annuity payouts will do that. When kids inherit an IRA or 401(k) or 403(b), there are tax rules and hoops to jump through and forms to be filed by deadline, with a hefty penalty if it's not done. This is an honest-to-gosh "consult a tax professional" situation, and it needs to be done at time when coping with it is the last thing they want to do. You want to be sure that they will be getting enough to make it worth the hassle! I would be leery of a long guarantee period (i.e. payments might continue to your kids if you don't live out the full period). I may be putting too much weight on the "hassle" factor, but it's just something you should be aware of.

I personally like life annuities (TIAA lifetime payout contracts) and SPIAs. People who hate all annuities complain that much of what you receive is just the insurance company paying your own money back to you, which is true but irrelevant (beyond understanding that the payout rate is not like an "interest rate.") A reason why annuities are good is the existence of "mortality credits." The higher payout for people who need income for a long time is financed by the payouts that are not made to people who live a short time. The risk that you might receive a small number of payments is what makes it possible to finance the possibility that you might live long and need a large number of payments.

Now, during the guarantee period, you are not taking that risk, and you are not receiving any mortality credits. For the guarantee period, the insurance company really is just paying your own money back to you. That isn't necessarily a bad thing. Furthermore, what the small difference in payouts for the 10- and 20-year period is telling you is that it really is quite likely that you are going to live 20 years. You can think about this either way, but one way to think about it is that although you could lose ten years' of payouts if you don't elect the 20-year guarantee, it's not very likely to happen.
Thank you for the thorough reply. All so very helpful and thought-provoking. I am now rethinking taking a guarantee at all, since the "hassle" factor for my children for this small amount is likely not worth it. And, I'm hoping they will benefit from the growing equity in our home and other investments. My break-even is 13 years on the $55k. Would you just do a single payout with no guarantee period?

I've heard about the "graded payout" but I don't know if my money qualifies. That was on my list of questions to ask. I'm assuming level payout is a steady amount and graded fluctuates with the stock market? Can this option be applied to Tradition or just to the variable portion?

I also like the idea of a lifetime payout. That certainty will help me sleep at night, even though the amount is small. Added to our SS and we will be able to cover the basics every month, assuming a paid off mortgage at that time.

Thanks, again, for weighing in.

DRGPS51
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Re: TIAA: Help with Payout Options

Post by DRGPS51 » Tue Sep 11, 2018 9:06 pm

Timoneer wrote:
Tue Sep 11, 2018 9:00 am
DRGPS51 wrote:
Tue Sep 11, 2018 1:29 am
I have a small annuity ($55k) split between Traditional and variable. I'm 66, still working as a consultant part-time, and married with 3 adult kids. My husband works full-time.
...I now need to decide how to take my TIAA payout--lifetime or 10 payments over 9 years...
Why do you need to decide now? With both of you still working, presumably you do not need the extra income at the moment.

Four or five years from now when you must start RMD's is the real decision deadline, and you will have additional options. One is taking RMD's only (TIAA calls it MDO). There is also an interest only option. Or by delaying any annuitization, the eventual payout will increase.

Personally, I would not do the 9 year payout on the $40K in TIAA Traditional fund. It is an excellent part of your fixed income allocation that can not be matched by anything at Vanguard. As for the other $15K in Cref, either leave it alone for now, as a more 'liquid' portion of your TIAA account, or roll it over to Vanguard.
You raise an excellent point and one I hadn't even considered! You're right--I don't need to take it now, while we are both working. I was under the (false) impression that at 66, I had to take it! I know so little :? and, of course, TIAA consultants do not give any advice. (That's why I'm here!) I see the benefit of delaying annuitization and increasing the eventual payout. I will leave the $15k liquid, since I can't do a rollover of that money to Vanguard. Actually, it was invested in Vanguard and, through some misunderstanding, a TIAA consultant moved it to be part of the annuity, but kept it in Cref stock. Does that make sense? I was not happy when I received that notification! I know I didn't authorize it, but maybe it doesn't matter...

I have a naive question. I didn't realize annuities were subject to RMDs. (Does that apply to my Vanguard Roth?) So, the RMD will start at 70 1/2 and will that money also be taxed? (Sounds like I won't be left with much out of the roughly $300 per month.)

Thank you for the truly great advice! I'm so glad I found this forum.

22twain
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Re: TIAA: Help with Payout Options

Post by 22twain » Tue Sep 11, 2018 9:08 pm

DRGPS51 wrote:
Tue Sep 11, 2018 1:29 am
I'm 66 [...] I now need to decide how to take my TIAA payout
Why now? As far as I know, there's nothing special about age 66 as far as TIAA is concerned. Both of you are still working. Do you need the annuity payments to help cover current living expenses?

My wife and I have enough saved up outside of our TIAA accumulations so that we can wait until age 70 to start Social Security and decide what to do with TIAA. At that point, unless our expenses increase significantly, SS will cover them completely, and we'll simply take RMDs from TIAA and re-invest them in our taxable accounts. At some point our expenses will probably increase, e.g. when we move into a retirement facility, and then we can annuitize enough to cover the additional expense.

The longer one waits to annuitize, the higher the monthly payout.
I'm assuming level payout is a steady amount and graded fluctuates with the stock market?
As I understand it, with graded payout they basically hold back some of the money you would have gotten early on with level payout, keep it invested, and then use the extra gains to increase the payout gradually. This is separate from whatever fluctuation you get from the variable annuity, which depends on which account you base it on: TIAA Traditional (little or no fluctuation), CREF Stock (varies with stock market returns), etc.
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DRGPS51
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Re: TIAA: Help with Payout Options

Post by DRGPS51 » Tue Sep 11, 2018 9:24 pm

22twain wrote:
Tue Sep 11, 2018 9:08 pm
DRGPS51 wrote:
Tue Sep 11, 2018 1:29 am
I'm 66 [...] I now need to decide how to take my TIAA payout
Why now? Both of you are still working. Do you need the annuity payments to help cover current living expenses?
No, we don't need the annuity payments to cover living expenses. Currently, we are making $17k per month and continuing to save for the years when we can no longer work.
22twain wrote:
Tue Sep 11, 2018 9:08 pm
My wife and I have enough saved up outside of our TIAA accumulations so that we can wait until age 70 to start Social Security and decide what to do with TIAA. At that point, unless our expenses increase significantly, SS will cover them completely, and we'll simply take RMDs from TIAA and re-invest them in our taxable accounts. At some point our expenses will probably increase, e.g. when we move into a retirement facility, and then we can annuitize enough to cover the additional expense.
This is an interesting strategy. So you will take the RMD from TIAA and re-invest in an IRA or a Roth? When it comes to investing and strategizing how to manage our money, reduce taxes, etc. in retirement, my husband and I are both in a category of "we don't know what we don't know." We really need to find a good tax accountant, because we get hit hard on taxes as sole proprietors of our businesses. We feel lucky to be making this catch-up money, but we are working without a game plan. Scary.

Thank you for your good advice.

NoHeat
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Re: TIAA: Help with Payout Options

Post by NoHeat » Tue Sep 11, 2018 10:05 pm

My TIAA rep says that one can annuitize anytime before age 80, but not after. That’s for my employer’s contract — you might ask them about yours, just to be sure you don’t wait too long.

grok87
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Re: TIAA: Help with Payout Options

Post by grok87 » Wed Sep 12, 2018 7:18 am

DRGPS51 wrote:
Tue Sep 11, 2018 9:06 pm
Timoneer wrote:
Tue Sep 11, 2018 9:00 am
DRGPS51 wrote:
Tue Sep 11, 2018 1:29 am
I have a small annuity ($55k) split between Traditional and variable. I'm 66, still working as a consultant part-time, and married with 3 adult kids. My husband works full-time.
...I now need to decide how to take my TIAA payout--lifetime or 10 payments over 9 years...
Why do you need to decide now? With both of you still working, presumably you do not need the extra income at the moment.

Four or five years from now when you must start RMD's is the real decision deadline, and you will have additional options. One is taking RMD's only (TIAA calls it MDO). There is also an interest only option. Or by delaying any annuitization, the eventual payout will increase.

Personally, I would not do the 9 year payout on the $40K in TIAA Traditional fund. It is an excellent part of your fixed income allocation that can not be matched by anything at Vanguard. As for the other $15K in Cref, either leave it alone for now, as a more 'liquid' portion of your TIAA account, or roll it over to Vanguard.
You raise an excellent point and one I hadn't even considered! You're right--I don't need to take it now, while we are both working. I was under the (false) impression that at 66, I had to take it! I know so little :? and, of course, TIAA consultants do not give any advice. (That's why I'm here!) I see the benefit of delaying annuitization and increasing the eventual payout. I will leave the $15k liquid, since I can't do a rollover of that money to Vanguard. Actually, it was invested in Vanguard and, through some misunderstanding, a TIAA consultant moved it to be part of the annuity, but kept it in Cref stock. Does that make sense? I was not happy when I received that notification! I know I didn't authorize it, but maybe it doesn't matter...

I have a naive question. I didn't realize annuities were subject to RMDs. (Does that apply to my Vanguard Roth?) So, the RMD will start at 70 1/2 and will that money also be taxed? (Sounds like I won't be left with much out of the roughly $300 per month.)

Thank you for the truly great advice! I'm so glad I found this forum.
Wait what happened with the rep moving something from vanguard to tiaa?

Just asking so this doesn’t happen to me...
Keep calm and Boglehead on. KCBO.

aristotelian
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Re: TIAA: Help with Payout Options

Post by aristotelian » Wed Sep 12, 2018 8:05 am

DRGPS51 wrote:
Tue Sep 11, 2018 8:36 pm
aristotelian wrote:
Tue Sep 11, 2018 6:32 am

For the variable, am I correct that you have not actually annuitized yet, so you could cash it out and roll it into an IRA? Or could you use it to add to your Traditional?
A TIAA consultant went ahead--without my understanding or approval--and annuitized the $15k portion invested in Vanguard, but kept it "variable" in CREF stock. I think when I'm ready to start taking the payout, I'll probably roll it into Traditional. The whole process has been confusing and dealing with various TIAA consultants, some of whom are knowledgeable and some not-so-much, has put me in a kind of limbo not knowing what to do. The advice I'm getting here is priceless.
Is it possible that you are (understandably) confused by TIAA's terminology? They have a class of mutual funds, which they refer to as "Variable Annuity" because you have the option to annuitize them later. For example, their stock index in my plan is called is labelled "CREF Equity Index R2 (Variable Annuities)." Until you actually annuitize them, as I understand it, they behave exactly the same as mutual funds, i.e. you can cash out at any time. The only thing that is different is that you have the option to annuitize in retirement. I used to have my portfolio in these index funds but transitioned out of them when they raised our expense ratios.

I hate TIAA with a passion because their terminology is different than everyone else and their options are so complex. They are not terrible, but they are an insurance company rather than a brokerage

The Wizard
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Re: TIAA: Help with Payout Options

Post by The Wizard » Wed Sep 12, 2018 8:18 am

DRGPS51 wrote:
Tue Sep 11, 2018 8:36 pm
A TIAA consultant went ahead--without my understanding or approval--and annuitized the $15k portion invested in Vanguard, but kept it "variable" in CREF stock...
I think you are using incorrect terminology here.
When we say "annuitized", we mean transitioning a portion of your assets from accumulation mode to lifetime monthly payout mode.

There's *no way* a TIAA rep can do that without you filling out a multipage form and signing it.

When you are in accumulation mode, CREF Stock, TREA, and even TIAA Traditional act just like Mutual Funds, with the exception of withdrawal restrictions on some flavors of Trad...
Attempted new signature...

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Re: TIAA: Help with Payout Options

Post by The Wizard » Wed Sep 12, 2018 8:31 am

grok87 wrote:
Wed Sep 12, 2018 7:18 am
...Wait what happened with the rep moving something from vanguard to tiaa?

Just asking so this doesn’t happen to me...
Sometimes employer plans with TIAA change to add or remove investment options inside or outside of TIAA. My plans certainly have.

It may be that the OP's had such a change which eliminated the particular Vanguard fund with a default transition of those funds to CREF Stock...
Attempted new signature...

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Timoneer
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Re: TIAA: Help with Payout Options

Post by Timoneer » Wed Sep 12, 2018 8:39 am

DRGPS51 wrote:
Tue Sep 11, 2018 9:06 pm
..I have a naive question. I didn't realize annuities were subject to RMDs. (Does that apply to my Vanguard Roth?) So, the RMD will start at 70 1/2 and will that money also be taxed? (Sounds like I won't be left with much out of the roughly $300 per month.)
Your TIAA Traditional and CREF funds are probably tax-deferred, so you will be required to pay tax on them whenever they are withdrawn, whether by lifetime annuity, interest only payout option, or RMD (the whole point of the Required Minimum Distribution is that the government wants you to start paying taxes on those tax deferred savings).

With you and your husband still working, it is probably best that you do not withdraw any of these 403b or IRA funds now because you will be taxed at your current high tax bracket. It is better to wait until after retirement when it appears that you will be in a lower tax bracket.

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jjustice
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Re: TIAA: Help with Payout Options

Post by jjustice » Wed Sep 12, 2018 9:27 am

DRGPS51 wrote:
Tue Sep 11, 2018 8:52 pm
I've heard about the "graded payout" but I don't know if my money qualifies. That was on my list of questions to ask. I'm assuming level payout is a steady amount and graded fluctuates with the stock market? Can this option be applied to Tradition or just to the variable portion?
Graded payout is a unique option for TIAA Traditional annuities. Any interest earnings on your Traditional annuity above 4% are reinvested into the annuity rather than being paid out to you. This causes the annuity to be larger in subsequent years. It is a form of systematically deferring some of your annuity each year and reinvesting it. Graded payment does not fluctuate with the stock market. The variable annuities like TIAA Real Estate or CREF Stock vary with the yearly performance of their investments.

You really should read the brochure that I linked earlier. It will help you to understand TIAA annuities. Here is the link again.

https://www.tiaa.org/public/pdf/pubs/pd ... income.pdf

John

NoHeat
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Re: TIAA: Help with Payout Options

Post by NoHeat » Wed Sep 12, 2018 9:39 am

jjustice wrote:
Wed Sep 12, 2018 9:27 am

You really should read the brochure that I linked earlier. It will help you to understand TIAA annuities. Here is the link again.

https://www.tiaa.org/public/pdf/pubs/pd ... income.pdf
Thanks for the link.

It mentions "TIAA’s Graded Payment Method is only available for vintages with payouts based on an interest rate of 4% or more."

Does TIAA publish a table of vintage rates and their dates? I have no idea what my vintage rates actually are.

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jjustice
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Re: TIAA: Help with Payout Options

Post by jjustice » Wed Sep 12, 2018 11:40 am

NoHeat wrote:
Wed Sep 12, 2018 9:39 am
Does TIAA publish a table of vintage rates and their dates? I have no idea what my vintage rates actually are.
Yes, you can find it at the link below. Contributions from 1/1/12 through 12/31/16 are currently ineligible for the graded method payout. All other contributions are eligible.

https://www.tiaa.org/public/investment- ... r=47933630 (Link corrected after original post.)

John

22twain
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Re: TIAA: Help with Payout Options

Post by 22twain » Wed Sep 12, 2018 1:54 pm

DRGPS51 wrote:
Tue Sep 11, 2018 9:24 pm
22twain wrote:
Tue Sep 11, 2018 9:08 pm
we'll simply take RMDs from TIAA and re-invest them in our taxable accounts.
This is an interesting strategy. So you will take the RMD from TIAA and re-invest in an IRA or a Roth?
No, that money has to go into an ordinary taxable account. RMDs can't be rolled over to a traditional or Roth IRA. After you've satisfied your RMD for the current year, you can take out additional money and roll it over into an IRA.

That brings up another idea... you don't need to take RMDs yet, so you can simply roll money that is in the variable-annuity accounts, or in a liquid version of TIAA Traditional (SRA or GSRA account), into your IRA and invest it together with the money that's currently in the IRA. Any money that is in an illiquid version of TIAA Tradtional (RA or GRA account) has to come out using a Transfer Payout Annuity a.k.a. TPA (ten payments over nine years and a day).

That is, don't annuitize at all, except for the TPA if necessary. This might make sense because (a) you don't need annuity income to help cover your expenses, and (b) your TIAA accumulation is a fairly small fraction of your assets. Putting it all into the IRA would simplify things.
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mrc
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Re: TIAA: Help with Payout Options

Post by mrc » Wed Sep 12, 2018 2:11 pm

22twain wrote:
Wed Sep 12, 2018 1:54 pm
That is, don't annuitize at all, except for the TPA if necessary. This might make sense because (a) you don't need annuity income to help cover your expenses, and (b) your TIAA accumulation is a fairly small fraction of your assets. Putting it all into the IRA would simplify things.
This is exactly what spouse and I are doing now, just two payments in so far.
If it’s not long term it’s small talk

aristotelian
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Re: TIAA: Help with Payout Options

Post by aristotelian » Wed Sep 12, 2018 2:18 pm

22twain wrote:
Wed Sep 12, 2018 1:54 pm
That brings up another idea... you don't need to take RMDs yet, so you can simply roll money that is in the variable-annuity accounts, or in a liquid version of TIAA Traditional (SRA or GSRA account), into your IRA and invest it together with the money that's currently in the IRA. Any money that is in an illiquid version of TIAA Tradtional (RA or GRA account) has to come out using a Transfer Payout Annuity a.k.a. TPA (ten payments over nine years and a day).

That is, don't annuitize at all, except for the TPA if necessary. This might make sense because (a) you don't need annuity income to help cover your expenses, and (b) your TIAA accumulation is a fairly small fraction of your assets. Putting it all into the IRA would simplify things.
+1, I plan to get any liquid funds out of TIAA the very next day after I leave my job.

DRGPS51
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Re: TIAA: Help with Payout Options

Post by DRGPS51 » Wed Sep 12, 2018 9:02 pm

aristotelian wrote:
Wed Sep 12, 2018 8:05 am
DRGPS51 wrote:
Tue Sep 11, 2018 8:36 pm
aristotelian wrote:
Tue Sep 11, 2018 6:32 am

For the variable, am I correct that you have not actually annuitized yet, so you could cash it out and roll it into an IRA? Or could you use it to add to your Traditional?
A TIAA consultant went ahead--without my understanding or approval--and annuitized the $15k portion invested in Vanguard, but kept it "variable" in CREF stock. I think when I'm ready to start taking the payout, I'll probably roll it into Traditional. The whole process has been confusing and dealing with various TIAA consultants, some of whom are knowledgeable and some not-so-much, has put me in a kind of limbo not knowing what to do. The advice I'm getting here is priceless.
Is it possible that you are (understandably) confused by TIAA's terminology?

I hate TIAA with a passion because their terminology is different than everyone else and their options are so complex. They are not terrible, but they are an insurance company rather than a brokerage
Absolutely! I received a confirmation of "transfer of funds." Roughly $15k was moved out of Vanguard Institutional Index into CREF Stock R2. As I understood the conversation with the TIAA consultant, this move would prevent me from moving that $15k out of TIAA altogether. I recall the discussion, but not the approval to do that. That's why I was referring to it as "annuitized" as in "locked in." I now understand that term refers to the payout phase. I looked carefully at the form and I have 60 days to contest this transfer.

So, it sounds like this was just a transfer of funds from one mutual fund to another? That money is not locked into the annuity?

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Re: TIAA: Help with Payout Options

Post by LadyGeek » Thu Sep 13, 2018 6:52 pm

InMyDreams has a similar question which I've moved into a stand-alone thread. See: [TIAA: Can initial payout rate go down?]

This thread is now in the Personal Finance (Not Investing) forum (annuity).
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