Do variable annuities belong in a retirement plan?
November 25, 2020 by Michael Finke
In 1952, The Teachers Insurance and Annuity Association (TIAA) sold the first variable annuity (VA) developed by Harvard Ph.D. economist William Greenough to Brown University President Henry M. Wriston. Since then, over a million education employees have invested in VAs through the TIAA College Retirement Equities Fund (TIAA-CREF). The original VA was seen as a creative solution to the retirement income puzzle.
The variable annuity concept as originally envisioned is remarkably simple. The initial purpose of the VA was to provide a higher income to retirees than fixed annuities, for the trade-off of removing the stronger guarantees that fixed annuities provide.
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