With the availability of traditional pensions all but gone, many Americans are now responsible for funding their own retirements, leaving many to rely heavily on 401(k) plans and IRAs. Fortunately, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law in 2019 to assist with this daunting task.
There are several ways in which the law affects your retirement savings, one notably around the use of annuities. The SECURE Act makes it easier for 401(k) plan sponsors to offer annuities and other “lifetime income” options to plan participants, helping ease the common concern of running out of funds in retirement.
TIAA, one such provider of workplace-based retirement plans, has just added a deferred fixed annuity option for corporate 401(k) plans, according to a recent ThinkAdvisor article.
The TIAA Secure Income Account (SIA) is distributed by subsidiary and asset manager, Nuveen, with $1.2 trillion in assets.
“People are living longer and need help preparing for a secure retirement, yet few corporate defined contribution plans offer the guaranteed lifetime income they need,” said Thasunda Brown Duckett, president and CEO of TIAA. “Building on our heritage, we are offering companies of all types and their employees a solution to more efficiently save, invest and ensure those assets last through retirement.”
The TIAA Secure Income Account provides protection of principal, guaranteed growth, low volatility and lifetime income with potentially increasing payments. Those who choose to annuitize will not be required to pay any expenses or commissions, with balances offering minimum guaranteed rates between 1% and 3%, resetting each March.
Enrollees are able to take the account with them if they leave their employer or the workforce. Upon retirement, they then have the option of turning some or all of their savings in the account into lifetime, monthly paychecks.
For more information about annuities and your retirement savings plan, please visit our website, www.annuityfyi.com. You can also call 1-866-223-2121 to speak with a registered agent, or send us an email at firstname.lastname@example.org.
Written by Rachel Summit