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TIAA Annuities Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

TIAA, also known as the Teachers Insurance and Annuity Association of America, was first established in 1918 by the Carnegie Foundation for the Advancement of Teaching. Its initial purpose, true to its name, was to provide life insurance and guaranteed retirement income to educators. Today, TIAA offers a wide range of products, like banking services, investment products, life insurance and even home loans, all in addition to annuities.

Annuities, perhaps even more so than other retirement and investment tools, can be rather confusing to understand. There are several different types, each with their own distinct details, including various methods of earning returns, fee schedules and more. Consider working with a financial advisor in your area to better understand how annuities can play a role in your financial plan.

Annuity Fees Annuity Type Minimum Initial Premium More Information
TIAA Traditional Retirement Annuity Find an Advisor

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  • No annual fees
Fixed annuity $0

Annuity Type

Fixed annuity

Minimum Initial Premium

Intelligent Variable Annuity® Find an Advisor

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  • Annual Maintenance fee: $25
  • Mortality and Expense Risk Fee: 0.15% - 0.40%, depending on premium
  • Administrative Expense Charge: 0.10% - 0.70%, depending on premium
  • Portfolio Operating Expenses: 0.10% - 2.12%
  • Death Benefit Rider Fee: 0.10%
Variable annuity $2,500

Annuity Type

Variable annuity

Minimum Initial Premium

Investment Horizon Annuity Find an Advisor

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  • Annual contract fee: $25 if contract value is less than $25,000
  • Surrender charge: half of the account’s total fixed interest rate
Fixed annuity $5,000

Annuity Type

Fixed annuity

Minimum Initial Premium


As of 2020, TIAA holds the highest possible financial strength rating from three of the four major insurance company rating agencies: A.M. Best (A++), Fitch (AAA) and Standard & Poor's (AA+). The fourth is Moody’s, which rates TIAA at an “Aa1,” the second-highest rating on its scale.

TIAA Traditional Retirement Annuity

The TIAA Traditional Retirement Annuity is the flagship retirement savings product at TIAA. It is a fixed annuity, meaning it garners returns based on a predetermined interest rate that’s set by TIAA. As a result, any money you invest is guaranteed to still be around, with interest, once it’s time to withdraw for retirement.

This annuity can take a few different forms, depending on the specifics of your situation. In terms of withdrawal options, you can choose to pay out in regular installments over a period of several years, or for the rest of your life. There is no lump sum withdrawal option. Since this annuity may be connected to your employer retirement account, additional income options may become available should you leave your employer.


The Traditional Retirement Annuity doesn’t come with an annual maintenance fee, but you may encounter charges if you need to withdraw your funds in any manner that violates the terms of your contract. As exact fee rates depend on a number of factors specific to your contract and terms, TIAA does not offer a specific withdrawal charge schedule.

Realistic Return Expectations

The TIAA Traditional Annuity has a guaranteed minimum interest rate of 3%. Consequently, your annual return may be higher, but it will never be lower. Rates vary depending on the specifics of your contract and the time at which you open your account.

Intelligent Variable Annuity®

The Intelligent Variable Annuity® is a variable annuity product from TIAA with a minimum opening investment of $2,500. You, the annuitant, have your pick of more than 60 different investment options within the annuity. Each of these options is centered around a different investment fund or model portfolio in which you’re able to invest in. These range from riskier stock-centric choices to bond-based portfolios and indexed funds.

As is the case with any variable annuity, returns are never guaranteed. This is because investments have unavoidable risk, and a variable annuity is technically a vehicle by which you access the investment market. To lessen your chance for unexpected returns, be sure to select the fund or portfolio that most closely aligns with your personal needs and financial situation. A financial advisor can help you decide on an investment that fits your financial plan and investing goals.

The Intelligent Variable Annuity does not have a stated maximum issue age. However, there is one age-related cutoff of which you should be aware. You have your choice between several distribution options with this annuity, but if you don’t choose before your 90th birthday, you will be locked into the “Fixed-Period” option. That means you’ll be forced into a payout over a specific number of years, from two to 30. If you die before the period is up, your beneficiary will receive the remainder of your payments.

For an extra fee, there is an optional death benefit available with this annuity. Should you decide to buy into it, TIAA will guarantee that if you die before receiving any income from your annuity, your beneficiary will automatically receive the value of your contract or its principal minus withdrawals, whichever is greater.


Because of their high upside, variable annuities typically bring the highest fees of any of the primary annuity categories. In the case of the Intelligent Variable Annuity, you’ll have a handful of different fees to manage, starting with a $25 annual maintenance fee. If your account is worth more than $25,000, this fee will disappear, but you’ll still face the mortality and expense risk fee, which varies between 0.15% and 0.40% depending on how long you’ve owned your annuity and its balance. There is also an administrative fee that ranges from 0.10% to 0.70%.

Additionally, you’ll have to pay fees relating to the management of your investments. These come in the form of portfolio expenses that can range from 0.10% to 2.12%.

Many variable annuities come with withdrawal fees if you take out any money from your contract within the first few years of becoming an account owner. However, TIAA has managed to eliminate these charges from this product. However, you’ll still face a 10% income tax penalty on any withdrawals you make before turning 59.5.

Realistic Return Expectations

As there are around 60 funds and portfolios to choose from, there isn’t a single expected rate of return with the Intelligent Variable Annuity. TIAA does provide some past performance statistics, though. Over the last five years, the investments available through this annuity have seen returns ranging from 0.44% to 20.58%.

You can protect yourself from potentially losing money by choosing a more risk-averse investment option. In the end, though, it’s impossible to completely erase the possibility of losses.

Investment Horizon Annuity

The TIAA-CREF Investment Horizon Annuity is a fixed annuity that requires at least $5,000 to open. TIAA offers fixed-rate terms of anywhere from one year all the way up to ten years. Once your term has elapsed, you can either withdraw your money, place it in one or more different fixed-term deposits (FTDs) or do nothing and let another FTD of the same length begin.

Should you choose to withdraw your money, you have a few more choices. If you’re young, chances are you’ll want to place that money somewhere else that offers tax-deferred benefits. Otherwise, you may be on the hook for income taxes and penalties. But if you’re ready to begin receiving payments, you can withdraw your funds as a lump sum, receive income over a fixed period of time or receive regular guaranteed payments for the rest of your life. You can also receive interest-only payments, but you must elect for this when you apply, and you can’t stop once the payments have started.

The standard death benefit for this product is equal to the remainder of the contract’s value. These payouts are paid to beneficiaries on the date that TIAA receives proof of the death of the annuitant or contract holder.


The only annual fee associated with the Investment Horizon Annuity is its $25 annual maintenance fee. However, if your annuity is worth more than $25,000, this fee is waived. 

Additionally, TIAA will assess a surrender charge on any withdrawal you make more than 30 days before the end of your fixed term. The exact charge will be half of your interest rate multiplied by the amount you withdraw. As always, annuitants can also expect to pay a 10% penalty to the IRS for any withdrawals made before age 59.5.

Realistic Return Expectations

The Investment Horizon Annuity from TIAA will produce a return that depends on the interest rate you secure, the length of your guaranteed term and how much you choose to invest. Available interest rates for this annuity fluctuate on a monthly basis, but they will never fall below 1%.

Retirement Income Tips

  • A financial advisor can help you determine if an annuity is right for you, and which annuity best fits your financial plan. Luckily, finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • When you’re planning out what your income will look like in retirement, don’t forget to take into account Social Security payments. If you don’t know what you’re in line to receive from Uncle Sam, check out SmartAsset’s Social Security calculator.

All information is accurate as of the writing of this article.

Best Places for Small Business Owners

SmartAsset analyzed data to find the best places for small business owners in the country. This interactive map shows the best counties for small business owners in the U.S. and in each state. Zoom between states and the national map to see the top spots in each region. Also, scroll over any county to learn about that region's small business statistics.

Rank County Small Business Returns Small Business Income Income Taxes

Methodology Which places are best for small businesses owners? To answer this question, we considered three factors: the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income compared to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.

Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.

These three factors were then indexed and equally weighted to yield our small business index. Places with the highest small business index are the places which ranked the highest in the study.

Sources: Internal Revenue Service (IRS), US Census Bureau 2018 American Community Survey, Government Sources, SmartAsset