Since 1918, over 100 years TIAA has been providing retirement income who need it in the United States. These are the questions that Americans are asking, they are the questions I am asking and my friends are asking.

TIAA is different to what we have in the UK

TIAA is short for Teachers Insurance and Annuity Association of America. It allows people to buy certainty for the future while giving them the chance of more than expected, if they choose what we would call “with profits” retirement income which can deliver more than the guaranteed rates (or less).

Here is the boring explanation that I learn from

Retirement payments refers to the annuity income received in retirement.  Guarantees of fixed monthly payments are only associated with TIAA’s fixed annuities.

TIAA may share profits with TIAA Traditional Annuity owners through declared additional amounts of interest during accumulation, higher initial annuity income, and through further increases in annuity income benefits during retirement. These additional amounts are not guaranteed beyond the period for which they were declared.

TIAA may provide a Loyalty Bonus that is only available when electing lifetime income. The amount of the bonus is discretionary and determined annually.

Annuity contracts may contain terms for keeping them in force. We can provide you with costs and complete details.

Transfers and withdrawals from TIAA Traditional are restricted by its underlying agreements that can affect the liquidity of the product. Converting some or all of your savings to income benefits (referred to as “annuitization”) is a permanent decision. Once income benefit payments have begun, you are unable to change to another option.

A variable annuity is an insurance contract and includes underlying investments whose value is tied to market performance. When markets are up, you can capture the gains, but you may also experience losses when markets are down. When you retire, you can choose to receive income for life and/or other income options.

The nearest thing we have to TIAA in terms of scale is Nest and I know that the smart people at Nest look at TIAA and work out how workplace pensions can interact with the guaranteed and with-profits approaches that have worked for America since 1948 and for American Teachers from 1918.

I wonder why we spend so much time looking at Australia when there is something more interesting in the USA which answers the questions people ask.

TIAA go out of their way to make retirement income simple.

and they allow people to decide the amount of income they get from guarantees and how much from investment.

We need not do it like the Americans but we should learn from them where it has worked for American people.

I call upon the DWP, who are looking at retirement income options from our DC savings plans. TIAA has more to teach us than Australia.

You can read it in comments but it deserves to be the blog! Thanks Andy Young for a take on why we don’t take notice of systems that don’t convenience our thinking.

We are hopeless at learning from others because we are
(1) ignorant
(2) beset with exceptionalism
(3) currently fixated by Freedom for the better off.
(4) riddled with confirmation bias nonsense. (Like Australia teaches us 12% is needed rather than 8%).

The USA and Canada can teach us a lot if we look at them properly.

US Social Security contains a bit of earnings relation. Like U.K. basic plus SERPS. As does Canada, which has the earnings related part partially funded.

Lots of great lessons round the world if we genuinely try to learn.