TIAA Expands Lifetime Income Access Through IRAs

TIAA announced Monday that it is expanding access to its lifetime income annuity products by offering them through the TIAA individual retirement account.

This allows anyone to have access to TIAA’s annuities, regardless of where they work. New enrollees in a TIAA IRA can select among TIAA’s annuities, including TIAA Traditional and the CREF variable annuities.

David Hughs, managing director of IRA product management at TIAA, says lifetime income has always been part of the TIAA IRA, but this expansion allows all working Americans, not just those in the nonprofit industry, to access these products.

“This is really driven by demand,” Hughs says. “Our advisers hear all the time from their clients [about] the desire for certainty that only guaranteed lifetime income can deliver. … Now we want to expand that access to all working Americans.”

Previously, Hughs explains, TIAA IRA clients needed to meet eligibility requirements, which included having either a personal or close family relationship with a not-for-profit employer. Now, this restriction has been lifted.

Hughs says the IRA and lifetime income products are also available to retail investors.

When an individual opens an IRA with TIAA, the individual will have the opportunity to save in TIAA Traditional, the company’s flagship fixed annuity. Investors can control whether, when and how much of their savings they want to turn into retirement income.

Hughs says the traditional fixed-annuity product offers a 4.57% rate, which is also fully liquid.

One can estimate a monthly retirement check from TIAA Traditional by using a calculator tool on the website.

The longer an individual saves in TIAA Traditional in a workplace plan, the larger the loyalty bonus he is eligible to receive, which will increase the income he can receive when lifetime income payments commence.

TIAA also projected that in 2025, retirees could earn 33% more money in their first year of retirement with a fixed annuity than they would if they used a 4% withdrawal strategy alone.

For example, a 67-year-old retiree with $1 million in savings could spend $40,000 in the first year of retirement using the 4% rule. TIAA argued that if the same person used one-third of their savings to provide income from a fixed annuity and began receiving payouts on March 1, 2025—and withdrew 4% of the remaining two-thirds—they would get $53,154 to spend in the first year of retirement.

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.