Products March 10, 2025

TIAA Expands Annuity Availability to Its IRAs

New enrollees in a TIAA IRA can now select among TIAA's annuities, including the TIAA Traditional and CREF variable annuities.

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TIAA is expanding the availability of its proprietary lifetime income annuities outside of employer-sponsored retirement plans, making them an option in the TIAA IRA.

After years of serving the 403(b) marketplace and, more recently, introducing lifetime income solutions to 401(k)s, new enrollees in a TIAA IRA can now select among TIAA’s annuities, including the TIAA Traditional and CREF variable annuities. 

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“The American retirement system is simply not working for far too many people. We are providing a simple solution to the more than 55 million Americans who do not have access to a retirement plan at work,” said Colbert Narcisse, chief product and business development officer at TIAA. “Through the TIAA IRA, Americans have the option for pension-like retirement checks that can help provide certainty they will have money to spend for the rest of their life.”

Increasing Retirement Income with Annuities

TIAA says workers putting some of their savings in fixed annuities can often provide more income to retirees than a 4% withdrawal strategy.

According to the company, in 2025, retirees could earn 33% more money in their first year of retirement than they would if they used the 4% rule alone. For example, the company shows an example of a 67-year-old retiree with $1 million in savings who, using the 4% rule, could spend $40,000 in the first year of retirement.

However, by purchasing a TIAA Traditional fixed annuity with one-third of savings and withdrawing 4% of the remaining two thirds, that person would get $53,154 to spend in the first year of retirement, assuming he began receiving payouts on March 1, 2025.

For employees who have been “long-term contributors” to TIAA Traditional inside their retirement plan during their working years, TIAA offers what it calls a loyalty bonus percentage. It says this can lead to higher payouts at upon annuitizing compared to a new contributor who annuitizes an equal amount at the same time.

TIAA paid more than $5.9 billion in lifetime income to retired clients in 2024 and has $1.4 trillion in assets under management as of December 31, 2024.

Data & Research March 10, 2025

Americans Plan to Increase Savings Amid Concerns About Affordability

Nearly seven in 10 mass affluent respondents (an income level at or above $90,000 annually) plan to increase their savings by $500 or more per month.

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Many Americans plan to increase their monthly saving in 2025, as they change financial habits to respond to economic concerns, according to a recent Equitable survey.

Specifically, four in 10 respondents intend to increase their savings by $500 or more. This percentage was higher among mass affluent respondents (an income level at or above $90,000 annually), with nearly seven in 10 indicating they plan to increase their savings by $500 or more per month.

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The survey, fielded in early December 2024, found four in five (80%) of Americans—regardless of income level—are worried about the affordability of everyday living costs. Six in 10 respondents view the economy as highly volatile. Americans continue to report inflation as the most common obstacle, citing it more than twice as much as other issues. Equitable notes this has stayed relatively consistent in each quarterly survey over the past year.

With concerns about purchasing power, comes interest in lifetime income, the survey found. In fact, nearly nine in ten (88%) of those surveyed said they value features that would provide a guaranteed payment at a regular interval for the rest of their life. Not surprisingly, however, less than half of respondents reported being confident about their understanding of annuities.

“It’s encouraging to see so many people aiming to improve their financial habits. Yet, with concerns about affordability, inflation and the economy still weighing heavily on many Americans, transforming those intentions into actions can feel daunting,” said Nick Lane, President of Equitable. “This is where a financial professional can help by offering guidance to navigate today’s ever-changing and uncertain landscape.”

Financial professionals are going to be in demand, Equitable believes, especially as trillions of dollars are expected to flow to today’s pre-retirees, Gen Xers and Millennials by 2030. Millennials (both men and women) and surviving spouses (predominantly pre-retiree women) are expected to take control of the bulk of the assets changing hands. Eight in 10 of those surveyed for a separate Equitable study about the great wealth transfer said they plan to work with a financial adviser to help manage their new wealth.

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