TIAA at a Glance: Rates, Products and Reviews

TIAA (formerly TIAA-CREF) is a private not-for-profit financial services organization that was founded in 1918 by Andrew Carnegie to provide secure retirement income for teachers and educators in the United States. TIAA has expanded its scope but still remains focused primarily on education, research, medical and governmental workers. TIAA is a Fortune 100 company and through its acquisition of Nuveen in 2014, has accumulated $1.3 trillion in assets under management across 50 countries.

TIAA does not offer typical annuities primarily because their flagship products were novel at their creation over seven decades ago. TIAA offers the CREF variable annuity and the TIAA Traditional, products that both act as “firsts” for the organization and insurance field in its entirety. Despite innovations in the annuity industry, these products have largely remained the same, bearing only a slight resemblance to their modern counterparts.

TIAA Traditional is the original and flagship product first established at the company’s founding. Designed to provide guaranteed lifetime income, it has evolved over the years to remain a trusted option for individuals seeking stability in retirement. With a strong history and commitment to financial security, TIAA Traditional continues to be a cornerstone of the company’s offerings.

In the most basic terms, TIAA Traditional is a deferred income annuity with a guaranteed minimum rate of return designed to be turned into lifetime income in retirement. However, if they stick with it long enough, there are additional benefits that can offer long-term participants more growth and income over time. While not guaranteed to happen annually, TIAA Traditional has credited participants with more than the minimum guaranteed amount every year since 1949.

Additionally, TIAA categorizes funding years into vintages, with older vintages able to earn higher amounts and get larger income payouts in the future via “loyalty bonuses”. The liquidity and minimum guaranteed rate of your contributions to TIAA Traditional will depend on the location and type of contributions.

For instance, within the TIAA Traditional structure are contribution types such as Supplemental Retirement Annuities (SRAs), Group Supplemental Retirement Annuities (GSRAs), Retirement Choice Plus (RCP), Group Retirement Annuities (GRA) and Retirement Annuities (RA), all of which have different rules and restrictions. Contribution types will differ in employer-sponsored plans and personal accounts such as an IRA.

TIAA offers a range of variable annuities designed to provide flexibility and growth potential for investors. From the historic CREF Variable Annuities to real estate-focused and mutual fund-based options, these products offer diverse opportunities to meet various financial goals. Whether you’re looking for direct real estate exposure, mutual fund investments or tax-deferral benefits, TIAA’s variable annuities can be tailored to your retirement needs.

One of the benefits of working with TIAA is their sincere commitment to social and societal improvements. This may not provide financial benefits directly, but the participants and clients of TIAA feel the company embodies the mission-driven approach that many non-profit workers seek in their own vocation. TIAA has served non-profit organizations for over 100 years and makes an effort to be an ethical company that its customers desire.

In addition to the legacy products of TIAA Traditional and CREF variable annuities, TIAA also owns and operates Nuveen Investments, an institutional money management firm. The size and scale of TIAA offers customers holistic financial advice, investment management and income planning options.

TIAA only offers two annuity products with fixed returns: TIAA Traditional and TIAA-CREF Investment Horizon Annuity.
The TIAA Traditional product offers varying minimum guaranteed rates of return depending on when the contributions were made, organized into vintages. Past rates have ranged from 2.75% to 6%. The location and type of TIAA Traditional accounts will impact guaranteed returns. For detailed information on how interest crediting is being applied, the types of accounts available and the prevailing interest rates offered, you will need to speak with a TIAA representative.

The TIAA-CREF Investment Horizon Annuity offers investors a choice of fixed term deposits that have defined maturity dates between five to 10 years and offer a guaranteed rate of interest over that period.

According to the prospectus, “We have no specific formula for setting the interest rates. Rates are influenced by, but do not necessarily align with, interest rates on fixed income investments we may acquire with Premiums received. FTDs earn interest at a rate that is guaranteed to be no less than the minimum stated in your contract, which will never be less than 1%.”

Currently, no interest rates are advertised for this product, and investors should contact a TIAA representative for more information.

TIAA is recognized for its financial strength and stability, supported by top-tier credit ratings from major agencies and a solid track record in investment management.

TIAA boasts superior ratings from four credit rating agencies that review insurance and annuity companies. TIAA is one of only three companies in the US that can claim the highest ratings from three of the rating agencies. These ratings demonstrate a strong confidence in TIAA’s ability to meet policyholders’ claims and income obligations.

TIAA has firmly remained a powerhouse in investment management and retirement planning, all while remaining a not-for-profit organization. They rank as a top 20 global asset manager and one of the largest real estate property owners in the U.S. They hold $1.3 trillion in total assets under management and have over 4.7 million clients.

The standard measure of client satisfaction in the insurance and annuity industry is the National Association of Insurance Commissioners’ (NAIC) Complaint Index, which is a yearly report produced on all insurers. This report compares a given insurer’s complaints against the entire industry.

According to TIAA’s most recent report (2023), the National Complaint Index is always measured as 1.0. A score of 2.0 is twice as high as the broader industry average, while a score 0.5 is half as high as the broader industry average.

TIAA’s annuity division scored above average on the 2023 J.D. Power Customer Satisfaction Index Ranking, which measures the overall customer satisfaction of insurance companies and annuity providers. While TIAA scored a 807 out of 1,000 scale, which is slightly above the study average of 800, it was not ranked because it did not meet certain award criteria.

When considering TIAA annuities, it’s essential to weigh their advantages and disadvantages. Understanding the pros and cons can help you make an informed decision about whether these products align with your retirement goals and financial needs. Here’s a closer look at what TIAA annuities offer and some potential drawbacks to consider.

TIAA was originally created for educators, and remains the haven for non-profit organizations to offer unique solutions. TIAA’s core mission is servicing the people who are teaching, researching, healing and governing the citizens of the United States. As noble of a mission as this is, TIAA is not an ideal choice for the uninitiated. If you do not have TIAA as an employer-sponsored retirement plan custodian, you will be unfamiliar with their products and may find their tools and technology antiquated. The lack of clear information on how their products work and the difficulty in accessing information can be frustrating.

TIAA is a strong and stable financial institution but their conservative investment strategy favors limited mutual funds and basic annuities that do not offer much choice or flexibility to the annuity shopper looking for innovative protection strategies, living benefits or other optional riders.

Editor Norah Layne contributed to this article.