This review is meant to show you the strengths and weaknesses of the TIAA Intelligent Investor Variable Annuity. Today I’ll walk you through my analysis, in this article we’ll cover important details on how this annuity works, so you know what to expect from it.
- Product Type
- Investment options that are available and their realistic long-term investment return expectations
- How it can best help you as part of your financial plan
- How it’s poorly used as part of your financial plan
TIAA Intelligent Investor Variable Annuity Quick Facts
|Product Name||TIAA Intelligent Investor Variable Annuity|
|Type of Product||Variable Annuity|
|Standard & Poor’s Rating||“AA+” (Excellent)|
There are a few ways that Agents might pitch this product
- Low fees
- No surrender fees
- Investment Flexibility
- Enhanced Death benefit
Is the TIAA Variable Annuity actually an Intelligent Investment?
Before responding to this question, we should review how agents and the brochure guide attempt to sell this annuity. There are some ways agents may try to sell you this annuity: 1) They say it has low fees compare to similar annuities in the marketplace. 2) It is a smart investment to defer your money until retirement. 3) Growth Potential. 4) Flexible income options. 5) Guarantees for you and your loved ones.
First, I’d like to address that this annuity, in fact, is a low fee annuity. However, it is not as they put it. The fees for this annuity are not as clear as they make it seem to be. Later on this review, I´m going to break down the fee structure for this annuity for you to better understand how it works.
They also say it is a smart way to deffer your qualified money, and yes! It is, but “annuities” in general are a good vehicle to deffer your money, it is not that this annuity has that special characteristic.
About the “Flexible Income Options”, it is kind of true because they have around 60 investment options that you can choose from, but when you compare it to other similar annuities, it is actually a low number, most variable annuities like this one offer 100+ investment options.
They do offer guaranteed income for you and your loved ones, however, what they don’t tell you is that in order to get the enhanced death benefit you have to pay a fee. Take a look below.
You can learn more by downloading the prospectus by clicking here Prospectus download
Before we go into detail, here is an important disclosure
TIAA Intelligent Investor Variable Annuity is meant to be an independent review at the request of readers, in addition, so they could see my perspective as a Certified Financial Planner CFP®, Designee when breaking down the positives and negatives of this particular model annuity. This is an independent product review, not a recommendation to buy or sell an annuity. TIAA Life has not endorsed this review in any way, nor do I receive any compensation for this review. Before purchasing any investment product, be sure to do your own due diligence and consult a properly licensed professional, should you have specific questions, as they relate to your individual circumstances. This is not specific advice. Your advisor may know more about your circumstance to make an appropriate recommendation. All names, marks, and materials used for this review are property of their respective owners.
Information on TIAA
The Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA, formerly TIAA-CREF), is a Fortune 100 financial services organization that is the leading provider of financial services in the academic, research, medical, cultural and governmental fields. TIAA serves over 5 million active and retired employees participating at more than 15,000 institutions and has $1 trillion in combined assets under management with holdings in more than 50 countries
TIAA Intelligent Investor Variable Annuity Fee Breakdown
|Account Fee||$25 (wave is the contract value is over 50k)|
|Core Contract Charge||0.10 – 0.30% (current 0.10%)|
|Funds Fees||0.35 – 2.00%|
|M&E Risk Charge Fee||0.10 – 0.40%|
|Premium Taxes Fee (in case you liquidate)||0.25%|
|Total||Aprox. Current Fees = 1.35% + $25 per year|
If you check out this annuity’s brochure guide, Link Here! They show you a hypothetical example of how fees can affect the account value of an annuity. They show different types of fees in different time frames, with two scenarios, one the annuity performs well, with 6% return, and in the other one the annuity performs badly, and the fees end up eating the account value. However, what they fail to explain how the “real” fees for the TIAA Intelligent Investor may affect your account value. They only show a hypothetical example, but with the fee structure broken down in this review, you can use the same example to approximate your returns or losses.
This annuity does not have any surrender fees, however that does not mean that you don’t have to pay anything if you decide to withdraw your money. In fact, you’ll have to pay a sort of called “Premium Taxes Fee” which acts as a surrender fee, you will have to pay between 1-3.50% on your account value if you withdraw your funds before 59 ½.
Also the TIAA Intelligent Investor annuity sales’ pitch succeeds to tell you that is a low fee annuity but it fails to address that you have to add the investment funds’ fees that sometimes can be higher than the based admin fees.
How does the Mortality and Expense rider work for the TIAA Intelligent Investor?
|Accumulation Value less than $100,000||0.40%|
|Accumulation Value between $100,000||0.25%|
|Accumulation Value Greater than $500,000||0.15%|
|After the first 10-year contract||0|
This rider is identical as the review we did on Jackson National Elite Access II, so if you want to know more in detail how this rider works I encourage you to check out the explanation on that post. But basically, what this death benefit rider gives you, is that in the case of death, your beneficiaries will get the initial contract value as proceeds minus any withdrawal (if any) and it is also active after the income date has started.
The TIAA Intelligent Investor Variable Annuity has 60 funds for you to choose from. Some of them have been performing well over the years, however, you must take into account the fees the come with the funds you choose. In case you decide to buy this annuity the best way to pick the best funds, is to hire a certified financial planner that can evaluate the funds in very comprehensive way and give you the best returns possible. To see the most recent funds performances for this annuity click here!
Where it works Best:
- Enhanced Death Benefit
- Low fees
- For those looking for tax deferral
Where it works Worst:
- Those who need liquidity
- Those who need principal protection
- Fees’ transparency
AnnuityEdu’s Summary on the TIAA Intelligent Investor Variable Annuity
After reviewing TIAA Intelligent Investor Variable Annuity, we can say that it is really a low fee annuity, but as we reviewed before the fee structure is not clear for this annuity, and if you really want to know how they work, you have to read the fine prints in the prospectus, which really can give you the heads up whether you decide to buy this annuity or not. Also, the TIAA Intelligent Investor Variable Annuity does not give you principal protection so in case any economic collapse happens in the years ahead your money will not be protected. This is really worrying if you’re counting on this money to give you a lifetime income.
We encourage you to consult with a Certified Financial Planner that can run the numbers for you and create different scenarios for you to better understand where your money has the most probabilities to perform better in your retirement. Remember that the numbers never lie and creating a retirement income analysis is the best way to assess your future and retire with peace of mind.