Single Premium Immediate Annuities

Transcription

1 TIAA-CREF Life Insurance Company Single Premium Immediate Annuities Step closer to meeting your lifetime income needs

2 Securing a lifetime of retirement income TIAA: Financial services Nearly 100 years ago, Teachers Insurance and Annuity Association (TIAA) began offering retirement products to benefit members of the educational, medical, cultural, governmental and research communities. In 1999, TIAA-CREF Life Insurance Company (TIAA Life), a wholly owned subsidiary of TIAA, began offering additional retirement products to the families of TIAA participants and to the general public. As a subsidiary of TIAA, TIAA Life continues the tradition of offering competitive and affordable products. TIAA and TIAA Life are a part of the TIAA group of companies. Since 1918, our mission has been to serve those who serve others. In an ever-changing financial landscape, our financial consultants seek to maintain a high degree of personal and professional integrity. We believe in making your financial well-being our top priority. Contact your TIAA Life annuity representative today. TIAA.org/annuities TIAAlifesales@TIAA.org All solicitations pertaining to a contract for annuities may only be handled by an agent or broker licensed to engage in the business of annuities in the state in which you reside. An immediate annuity adds another paycheck to your retirement income needs The good news more and more of us are living longer. But as life expectancies and medical costs continue to increase, ensuring that you have adequate income for the long term has become more essential. We understand the challenges facing retirees and are here to help you build a retirement income stream to meet your long-term goals. A Single Premium Immediate Annuity (SPIA) from TIAA Life is one of the solutions we offer that can help you supplement your Social Security or other pension payments to help meet your lifetime retirement income needs. 1 SPIA creates an immediate income stream from a single lump-sum investment. With a minimum, after-tax contribution of $25,000, you can tailor your income payments to suit your preferences and needs. With SPIA, you can allocate your contribution to one or more of eight variable investment accounts or a fixed account. As your investment preferences change, you have some flexibility to shift funds among these accounts with no transfer fees. 2 Things to consider before purchasing an SPIA How much money do you need to supplement your retirement income? Do you need to provide income for yourself only or for another person as well? Are you (and the other person) in good health? Are you interested in the safety of guaranteed income, or are you willing to take additional risk for the possibility of higher returns? 3 Do you want to receive income for a certain period of time, or for life? Do you want to ensure that your income will continue to someone else if you die prematurely? 1. Lifetime income is subject to TIAA s Life s claims-paying ability. Payments from the variable accounts will rise or fall based on investment performance. 2. Some restrictions may apply. Please call us for details. 3. Past performance is no guarantee of future results. Investment return and principal value will fluctuate so your investment, when redeemed, could be worth more or less than the original cost. Single Premium Immediate Annuities 1

3 Your income choices Your fixed-period annuity choices You can set up your SPIA to pay you an income for a fixed period ranging from 5 to 30 years. (The fixed period cannot exceed the annuitant s life expectancy.) If you die before the end of the period chosen, income will continue to your beneficiaries until the end of the fixed period. A fixed-period annuity may be appropriate if you ll have income needs over a set time period, such as a mortgage or other expenses that will eventually be paid off. Setting up your SPIA to help meet your needs How much income you need and what kinds of guarantees you want are the most important issues to consider when purchasing your SPIA. When buying your SPIA, you ll need to decide how it will provide income and how you ll invest your assets. Choose your income First, do you want income to last for your lifetime or for only a certain number of years? 4 Your lifetime income annuity choices You can set up your SPIA to pay an income for life to you, or to you and your annuity partner. Once selected, the payout option may not be changed. When you purchase your SPIA, you can choose A one-life annuity Guarantees you (only) income for as long as you live. If you need lifetime income, you ll need to decide whether the income is needed for only you or for you and another person (your annuity partner). If you need income for only a fixed period of time, you ll need to decide how many years you want your payments to last (cannot exceed your life expectancy). A two-life annuity Guarantees lifetime income to you and, upon your death, your annuity partner. The level of income the surviving annuity partner receives depends on which option you choose: Full benefit to survivor Half benefit to annuity partner Two-thirds benefit to survivor Choose your investments Second, choose how to invest your savings. You can allocate your assets in fixed and variable investments to help you optimize your retirement portfolio to meet your income needs. A TIAA Life annuity representative can help you determine what s suitable for your unique life income needs. Upon the death of either you or your annuity partner, the survivor will continue to receive the full amount of lifetime income. This is the only option in which income isn t reduced after a death. Upon your death, your annuity partner will receive lifetime income, but at half the amount you would have received had you lived. If your annuity partner dies before you, there is no reduction to your lifetime income. Upon the death of either you or your annuity partner, the survivor continues to receive lifetime income, but payments are two-thirds of the amount that would have been received had you both lived. This is the only option that reduces your income if your annuity partner dies before you. Since this is an after-tax annuity, the portion of the annuity payment that represents earnings will be taxable as ordinary income tax. 4. Any guarantees under annuities issued by TIAA Life are subject to its claims-paying ability. Payments from the variable investment accounts will rise or fall based on their investment performance. Since this is an after-tax annuity, the portion of the annuity payment that represents earnings will be taxable as ordinary income tax. 2 Single Premium Immediate Annuities Single Premium Immediate Annuities 3

4 How your income can survive you Even if you, or you and your annuity partner die prematurely, a guaranteed period can ensure that your named beneficiary will receive a portion of your lifetime income. A guaranteed period is available with both one-life annuities and two-life annuities. With a guaranteed period in place, your beneficiary will receive income for the rest of the guaranteed period if you, or you and your annuity partner die before it ends. Guaranteed periods are not needed for Fixed-Period Annuities since the income will continue for the remainder of the period chosen should something happen to you. While you can generally choose from guaranteed periods of 10, 15 and 20 years, you cannot select a guaranteed period that would continue income beyond your life expectancy or that of your annuity partner or beneficiary. Next, choose how the assets in your SPIA are invested Once you open your SPIA, you ll need to decide how to invest 5 your annuity assets. How you invest these assets will determine the income that your SPIA generates for you. You can choose to receive your annuity income from the Fixed Account, from one or more of the variable investment accounts, or from a combination of both. You also choose how frequently you want to receive your payments monthly, quarterly, semiannually or annually. Fixed annuity income Income from the Fixed Account is guaranteed (subject to TIAA Life s claims-paying ability) and will remain the same for the life of the contract, provided you do not make any transfers to or from the Account. Variable annuity income Income from the variable investment accounts may offer a hedge against inflation due to the potential for higher returns. Your income may increase or decrease depending on the investment results of the underlying funds. You can choose to receive your income from one or more of the investment accounts described on the following pages. Income you receive from the variable accounts will change based on investment performance. You can choose to receive the same income for a year at a time, which may help you with your budget. Or if you prefer to see an immediate change to your income, you can choose to have your income adjusted monthly. Through monthly income changes, you re likely to see less dramatic increases or decreases to your income than with the annual change. Even if you start out one way, you can change to the other method for part or all of your income. Requests to alter your income revaluation method can be made at any time until the close of the markets (usually 4 p.m. ET) on the last business day in March, and are effective on March Please keep in mind that there are risks associated with investing in securities, including loss of principal. 4 Single Premium Immediate Annuities Single Premium Immediate Annuities 5

5 Your SPIA investment choices SPIA offers eight variable investment account options to diversify your annuity portfolio, as well as the Fixed Account, which provides a guaranteed competitive rate of interest. Remember, you can also choose to receive a combination of fixed and variable payments. And you can make transfers between the fixed and variable accounts. Some restrictions will apply to transfers. Guaranteed Fixed Account Guaranteed mix of Bonds and Cash Domestic Equity Value Blend Growth Large-Cap Large-Cap Value Fund W W Growth & Income Fund Growth Equity Fund Small-Cap W W Social Choice Equity Fund Stock Index Fund Small-Cap Equity Fund Changing your investment choices after you begin income Your investment preferences and needs may change over time. We recommend periodically checking your asset allocation to ensure you re on track with your goals. If needed, you can transfer income among the accounts free of charge while you are receiving annuity payments, subject to certain limitations and restrictions, in the following ways: From one variable investment account to another variable investment account; From a variable investment account to the Fixed Account; or From the Fixed Account to the variable investment accounts However, once assets are transferred from the Fixed Account to a variable investment account, those assets can never be switched back to the Fixed Account. Transfers from the investment accounts may be made once per calendar quarter. Transfers from the Fixed Account are available only under One-Life and Two-Life Annuities, once per calendar year for up to 20% of the future annuity payments, or all future annuity payments over five years. International Equity Value Blend Growth Large-Cap International Equity Fund Other Sector Specific Real Estate Securities Fund See the prospectus for more information on the variable investments. If you would like assistance choosing among the variable investment options, please call your annuity representative at There are risks associated with investing in securities, including loss of principal. Equity funds are subject to market risk, growth stocks may be more volatile than value stocks due to their relatively high valuations, and growth investing may fall out of favor with investors. Stocks paying relatively high dividends may significantly underperform other stocks during periods of rapid market appreciation. Small-cap stocks may have limited marketability and may be subject to more abrupt or erratic market movements than large-cap stocks. Funds that invest in foreign securities are subject to special risks, including currency fluctuation and political and economic instability. The real estate industry is subject to various risks including fluctuations in underlying property values, expenses and income, and potential environmental liabilities. Due to the fact that the social screens in the social choice funds exclude some investments, these funds may not be able to take advantage of the same opportunities or market trends as funds that do not use such criteria. Funds that invest in fixed-income securities are not guaranteed and are subject to interest rate, inflation, and credit risks. This flexibility allows you to: Secure any potential gains by moving from a variable investment account to an account with a guarantee; respond to changing market conditions; and rebalance your asset allocation when you desire. For complete information on any of the income transfer options, call to speak with one of our annuity representatives. Tax treatment of annuity income Only the portion of each annuity payment attributable to interest and/or earnings is taxable. Generally, your principal is divided equally among the payments scheduled over your life expectancy or over the number of payments for a fixed period and returned to you tax free. The taxable portion of SPIA annuity payments is taxed as ordinary income. 6 Single Premium Immediate Annuities Single Premium Immediate Annuities 7

6 TIAA Life is here to help Let TIAA Life s experience help you through your retirement years. Your annuity representative can help you create an income stream and portfolio that s aligned with your goals. Guidance Our knowledgeable annuity representatives can help you assess your income needs, choose the right lifetime income stream for your current and future needs, and help you select your investment options within the annuity to help you meet your income needs. Our consultants will provide the guidance for your unique financial needs. Low expenses Our separate account contract charges are among the lowest cost in the industry. 6 Low expenses and no sales charges put more of your money to work for what matters most helping to achieve your supplemental income goals. Also, there are no fees to transfer your income to other investment choices as your financial needs change. 7 Investment strategy Our retirement-focused investment strategy is based on seeking to provide competitive, long-term performance while helping to protect principal through effective risk management. 8 Contact your TIAA Life annuity representative today. TIAA.org/annuities TIAAlifesales@TIAA.org 6. According to Morningstar, the average annual annuity expense charge is 1.34% for all non-group variable annuity policies in Morningstar Direct as of 7/7/2015. TIAA Life s Single Premium Immediate Annuities total contract separate account charges are 0.60% (guaranteed maximum charges 1.20%). There are no other contract charges. 7. In addition to separate account contract charges there are investment fund expenses that range from 0.09% to 0.60%. 8. While risk management is a key strategy at TIAA Life, no strategy or investment policy can eliminate or anticipate all market risks. 8 Single Premium Immediate Annuities

7 Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not bank deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value. You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call or log on to TIAA.org/prospectuses for underlying product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing. TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products. Single Premium Immediate Annuities contract form series: TCL-1009, TCL-1033, TCL-901, is issued by TIAA-CREF Life Insurance Company, 730 Third Avenue, New York, NY Each of the foregoing is solely responsible for its own financial condition and contractual obligations. Not available in all states. Annuity contracts contain exclusions, limitations, reductions of benefits and may contain terms for keeping them in force. We can provide you with costs and complete details TIAA-CREF Life Insurance Company (TIAA Life), 730 Third Avenue, New York, NY C17956A _ A12183-GENERIC (03/16)