TIAA Traditional and Lifetime Income Annuities Now Available to Public via IRA
June 18, 2025 by CardRatings
TIAA-CREF recently announced that they are allowing the public to invest in their fixed and income annuities inside a Traditional or Roth IRA (via Bogleheads). This includes their most well-known TIAA Traditional Annuity, which has traditionally been only available to those working in nonprofit colleges, universities, hospitals (TIAA stands for Teachers Insurance and Annuity Association of America).
This was a Father’s Day coincidence, as what they suggest is very similar to what I helped set up for my father. As a long-time educator, the bulk of his retirement savings was accumulated using the TIAA Traditional annuity through both employer and employee contributions. After considering many factors, I advised him to annuitize a portion of it upon retirement for guaranteed lifetime income. The rest of the portfolio was stock and bond mutual funds.
Wink’s Moore on the Market: Ummm…
Did we know that TIAA is allowing the public to purchase their annuities, direct, for use within an IRA (traditional or Roth)?
I must have missed the memo on that.
Some interesting commentary in this piece though:
“In the example that TIAA provides, they annuitize 1/3rd of the total available portfolio, and the rest is spent down using the popular ‘4% withdrawal rule.’ Their claim is that ‘annuitizing a portion of your savings with TIAA Traditional offers between 33% and 43% more income than a 4% withdrawal strategy.’”
“So a 67yo person taking a single-life income annuity with a 10-year guarantee, which pays out 8% of principal every year. So if you annuitized $1,000,000, you would get roughly $80,000 a year in annual income, guaranteed, every year until death (with minimum 10 years of payments, or $800,000). 8% is double (100% more) what you’d get out from the ‘4% rule,’ so if you annuitize 1/3rd if your portfolio, it would boost the first-year income by 33%. Math works out.” -sjm
