Any firm that works as extensively with a higher education clientele as we do needs to become familiar with one of the most interesting life insurance and annuity companies out there, the Teachers Insurance and Annuity Association, or TIAA.
This movement to its original name may very well reflect the place of TIAA in its industry. What it earns and how you can take your money from it is not the same from retirement plan to retirement plan, among contracts within a plan, and, often, across different participants in the same contract type!
This means, simply, that shares retain a fixed value although the interest may vary over time. As is the case with most bank accounts, your balance is reflective of a promise that TIAA is making to pay you a certain amount in the future. In pretty much every case, their ratings are among the best that a company can get. Simply put, ratings analysts think highly of TIAA. This account is invested relatively conservatively. Most assets are held in public and private bonds of medium to high quality, some mortgages, and a smattering of real estate, private equity and natural resources.
Regardless of the type of TIAA account you have, the income you receive from it is paid from this account, and the interest credited to it may be impacted by the performance of this account. Interest gets credited to TIAA accounts daily. Even on weekends. Since , TIAA has always paid additional amounts on top of their already impressive minimum rates. How do they figure the rate? Very few people know, but clearly they try to come up with a rate that combines competitiveness with profitability.
Every retirement plan for TIAA has its own structure. TIAA takes into account the size of the plan and the overall competitive environment when structuring the contracts for each institution and for products available to the general public. There is some standardization though, that holds across most plans:. These are the easiest to understand.
It is now organized as a non-profit organization that has taxable subsidiaries. All of TIAA's profits are disbursed to policyholders. TIAA's rebranding was meant to portray a simpler and cleaner image while acknowledging the company's year history. The company continues to offer services to customers such as individual retirement accounts IRAs , mutual funds, annuities, brokerage, plans, insurance, banking, home loans, and estate planning.
It is the number-one-ranked asset manager of real assets in farmland and U. While the creation of TIAA in as a means of providing guaranteed lifetime income and insurance was a groundbreaking new resource for teachers and educators, it was the establishment of CREF in that started the company on the road to becoming a diversified financial services firm.
Citing rapidly increasingly life expectancies, CREF allowed individuals the opportunity to add equity investments to their personal portfolios through a variable annuity product. It was designed to use the higher expected returns of stocks to help stretch out the retirement income streams of workers. Since , TIAA has made several acquisitions to grow its portfolio and product offerings.
TIAA has demonstrated a history of accepting investment strategies before the strategies became mainstream. In , the company was one of the first to utilize a broad portfolio of international stocks as part of its investment strategy. In , it introduced the Rollover IRA. In , TIAA offered individuals the ability to invest in directly-owned real estate properties. In , the company entered the marketplace.
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