[TIAA: Can initial payout rate go down?]

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InMyDreams
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Joined: Tue Feb 28, 2017 11:35 am

[TIAA: Can initial payout rate go down?]

Post by InMyDreams » Wed Sep 12, 2018 11:33 pm

[Moved into a stand-alone thread from: TIAA: Help with Payout Options --admin LadyGeek]

I'd hope this isn't too off topic?

But can someone talk about the payout rate once annuitized?

I've held some TIAA trad (401(a)/pension account) for a long time. I'm moving towards annuitizing it. The estimator says its payout rate is 7.1%

I understand that the rate may go up (a bit) if TIAA has good returns.

Can the rate/original payout amount ever go down?

I've asked the black box that is TIAA this question, and it seems like the answer is "no", but I should would love some other confirmation.

BTW, there an M* thread that has related info. Skip down to the September entries:
http://socialize.morningstar.com/NewSoc ... ageIndex=2

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jjustice
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Re: TIAA: Help with Payout Options

Post by jjustice » Thu Sep 13, 2018 8:28 am

InMyDreams, yogibearbull answered your question with a quotation from TIAA on the second page of the TIAA forum thread that you linked in your post.

Briefly, since 1995 there have been only increases, but decreases are possible and have occurred. TIAA Traditional is what is called a participating annuity. You participate in their fortunes.

John

InMyDreams
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Re: TIAA: Help with Payout Options

Post by InMyDreams » Thu Sep 13, 2018 4:03 pm

jjustice wrote:
Thu Sep 13, 2018 8:28 am
InMyDreams, yogibearbull answered your question with a quotation from TIAA on the second page of the TIAA forum thread that you linked in your post.

Briefly, since 1995 there have been only increases, but decreases are possible and have occurred. TIAA Traditional is what is called a participating annuity. You participate in their fortunes.

John
Thank you, John, but I'm still not clear - the 7.1% is the pay out rate, not the interest rate? Yes, I did read that post.

My specific question to both the TIAA messaging system and to my WMA: can the initial monthly payout amount that TIAA makes go down? The gobbledy-gook answer I got made me think it could not.

I understand that a TRAD, non-graded annuity might rise a bit over time, and that the gained amount may be lost, but can the monthly payment ever drop below the initial payment amount?

If it can go below that initial amount, how can I find out what is the rock bottom? Seems like people would want to know that for planning...

The Wizard
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Re: [TIAA: Can initial payout rate go down?]

Post by The Wizard » Thu Sep 13, 2018 7:01 pm

The answer is Yes, the payout rate in percent or in dollars for TIAA Traditional can drop below the initial payout rate.

In fact, the payout rate can drop all the way down to the Contractual rate, meaning zero Additional Amounts.

Now is anything reasonably close to this likely to happen?
Not on your life...
Attempted new signature...

InMyDreams
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Re: [TIAA: Can initial payout rate go down?]

Post by InMyDreams » Thu Sep 13, 2018 10:56 pm

ugh. So, when you signed the contract to annuitize, did it tell you how low the monthly payout could go?

InMyDreams
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Re: [TIAA: Can initial payout rate go down?]

Post by InMyDreams » Thu Sep 13, 2018 10:57 pm

InMyDreams wrote:
Wed Sep 12, 2018 11:33 pm
[Moved into a stand-alone thread from: TIAA: Help with Payout Options --admin LadyGeek]
Thanks, LadyGeek - and thanks for all that you do here at BH

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