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In 2005, and prior to the passage of the Pension Protection Act (PPA) a year later, approximately $70B of retirement assets were allocated to target date funds.1 Then, the PPA provided a safe harbor for target date funds and other asset allocation products/services. Today, almost $3T is allocated to target date products/services.1 Similarly, the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) of 2019 provides a safe harbor for employers to add annuities to their plan menus, if certain requirements are met. We could potentially see robust growth in these products/services as a result.
We, at Nuveen and TIAA, believe that adding the TIAA Secure Income Account to a well-diversified Qualified Default Investment Alternative (QDIA) can improve expected retirement outcomes, increase guaranteed lifetime income and reduce multiple risks. In this paper , we examine which components and how much of the portfolio could potentially be replaced, as well as potential timing.
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Visit tiaa.org/secure-income , or complete the following form to learn more about lifetime income solutions from our Nuveen Retirement Investing team.
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Endnotes
1 Morningstar Target Date Landscape report
The TIAA Secure Income Account is a fixed annuity issued by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY 10017: Form series including but not limited to: TIAA-UQDIA-002-K and related state specific versions.
Interest credited to the TIAA Secure Income Account includes a guaranteed rate, plus additional amounts as may be established by the TIAA Board of Trustees. Additional amounts are not guaranteed for periods other than the period for which they are declared. All guarantees under contracts issued by TIAA are based on TIAA’s claims-paying ability. Past performance does not predict or guarantee future results.
Annuity contracts may contain terms for keeping them in force. We can provide you with costs and complete details.
Not all contracts are available in all states or currently issued. Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability. The TIAA Secure Income Account is a guaranteed insurance contract and not an investment for federal securities law purposes.
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