Tiaa Retirement Plan Terms Of Withdrawal


Cares Act Provisions Provide Financial Options For Tiaa Retirement Plan Members

Episode 8: TIAA-CREF Retirement Plans Vastly Underperform

For Penn State employees who participate in the Alternate Retirement Plan , Tax Deferred Annuity Plan , and/or the 457 Deferred Compensation Plan, offered through TIAA, the Coronavirus Aid, Relief and Economic Security Act provides options for you to consider as you navigate financial decisions in the coming months. Before making any decisions, it is recommended that you reach out to your TIAA financial consultant to understand the effects of withdrawing retirement funds and evaluate your situation and financial goals.

Penn State has chosen to adopt the following CARES Act provisions for TIAAs retirement plan:

  • Penalties and withholding are waived for certain COVID-19-related distributions from retirement plan accounts
  • Ability to suspend loan repayments for up to one year for certain COVID-19-related reasons
  • Suspension of required minimum distributions for 2020 for all plan participants who are scheduled to receive such distributions

Learn How Tiaa’s Traditional Annuity Works

Most people working in the public education system have access to TIAA investment options within their employer-sponsored plan. Many soon-to-be retirees who have TIAA accounts are confused about how the TIAA Traditional Annuity option worksin particular, how it works when they want to take their money out.

To clear up this issue, it’s helpful to explain the annuity as two separate phases. The first is the investment’s accumulation phase, and the second is the payout phase.

Suspension Of Loan Repayments

Provided the above eligibility criteria are met, individuals with loans in effect on or after the CARES Act enactment date of Friday, March 27, 2020, can delay repayment or any loan payments due between Friday, March 27, 2020 and Thursday, December 31, 2020 for one year, with the term of the loan being extended by one year as well. If you elect to delay such payments, you will resume loan repayments with your scheduled payment due in January of 2021.

Note: If you delay payment, interest will continue to accrue and be added to your outstanding loan balance as of January of 2021.

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Life Annuity Guaranteed Payout Options

This option provides guaranteed income for as long as you live. You choose the annuity term such as life only, joint survivor, or life with a guaranteed period certain.

“Life only” means that you will receive income for the rest of your life. “Joint survivor” means that the annuity will be paid for as long as you or your partner lives. “Life with guaranteed period certain” means either life or a set period, like 10 years, whichever comes later. For example, if you receive income for five years and then die, your beneficiary would receive your income for the last five years. With these payout options, you must request an annuity quote to see what your monthly income would be.

You shouldn’t use the guaranteed interest rate to determine your payout rate. Interest rate and payout rate are not the same. Many TIAA participants misunderstand confuse the two and miscalculate the monthly income they might be able to receive.

Your payout rate is a customized number determined by your age, the time you request the quote, and the payout term you choose. It uses a guaranteed minimum interest rate in the formula, which is a different rate from the one used in the accumulation phase, to determine your payout amount.

With an annuity payout, each payment you receive includes interest and a return of some of your principal. Just like in the accumulation phase, you may receive additional interest amounts paid by TIAA on top of your guaranteed lifetime income during the payout phase.

Can I Withdraw My Tiaa Cref

Retirement planning with TIAA CREF Retirement Accounts ...

canfromMycan withdrawwithdrawal

. Similarly, you may ask, when can I withdraw from my TIAA CREF?

You can withdraw money from those accounts tax free as long as you take the money at least 5 years after January 1 of the year in which you first contributed to that plan, and you are either age 59 ½ or older, or considered disabled.

One may also ask, can I close my TIAA CREF account? Call customer service at 1-800-842-2252, if you prefer to speak to a representative over the phone. Let the customer service representative know that you would like to close your account.

Also asked, can I move my money out of TIAA CREF?

You can move funds out of TIAA Traditional through transfers or cash withdrawals in 10 annual installments. 1 When you do this: W You must use your entire balance in your TIAA contract, which may include both TIAA Traditional and the TIAA Real Estate Account.

How do I get out of TIAA Traditional?

You cannot take the money out of the Traditional Account two ways: 1) is to annuitize it but clearly you are not in a position to do that and 2) via a TPA which distributes the principal and interest in 10 ANNUAL distributions over a peeriod of 9 years and 1 day.

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What To Give Employees

If an eligible employee requests a withdrawal of retirement funds because of financial hardship, operating locations should provide the employee with the following documents:

Affidavit of Financial Hardship and Employee Hardship Withdrawal Certification Form

This document indicates the contract or account from which the distribution should be made, states the amount needed and how the funds will be used. In addition, the form provides certification that the amount the employee is withdrawing because of financial hardship does not exceed the amount of his or her financial need. It also stipulates that the employee agrees to the suspension of all contributions to the Optional Retirement Plan for 6 months beginning after the hardship has been approved.

At this time, the employee should also be directed to the investment company, TIAA-CREF or Fidelity, from which they are making the withdrawal so that they can get the forms required for withdrawal.

The employee should return both the RF and investment company forms to the operating location.

Suspension Of Required Minimum Distributions

To help provide relief for those required to take RMDs, the CARES Act allows you to cancel your 2020 RMD payments and restart them in 2021.

  • If you already have an RMD payment scheduled for this year:

You have the flexibility to cancel it, and TIAA will restart it automatically in 2021. Note: Established RMD payments that are scheduled will continue unless a participant takes action to cancel these payments by contacting TIAA as provided below.

  • If you have already started receiving your RMD this year:

You have the option to repay it as a rollover. If youve received a distribution on or after February 1, 2020, you have until Wednesday, July 15 to repay those funds to the Penn State Program or roll over those funds into a plan/IRA that accepts such rollovers. There has yet to be any guidance issued as to RMDs that took place in January of 2020 however, in past disaster scenarios, the IRS has extended that rollover period. TIAA will monitor regulatory activity and notify clients if an extension is granted in this context. Also, if you meet the conditions for a COVID-19 distribution as described above, you may classify this distribution as a COVID-19 distribution, subject to the same favorable tax treatment described above, which means you have three years to repay those funds to the Penn State Program, or roll over those funds into a plan/IRA that accepts such rollovers.

  • If you have not set up your RMD this year:

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Is Tiaa Cref An Ira Or 401k

Employer-sponsored plan contributions are normally coded D or E on your W2, Box 12. Unless its a Roth 401k, the amount of your contribution should be deducted from Box 1 of your W2. This is how it is stated.

Employers do not administer IRA contributions , thus they are different interview questions. To enter IRA contributions, follow these steps:

1) Go to the top menu and choose Federal Taxes.

2) Just below the main menu, select Deductions and Credits.

3) Select Retirement and Investments from the drop-down menu. View More

4) Next to Traditional and Roth IRA Contributions, select Start.

Strategy 1fixed Percentage Or 4% Rule

CREF Options at Retirement
  • A period of historically low interest rates make traditional income-producing investments like bonds less likely to generate the income that many retirees expected.
  • If inflation erodes the purchasing power of your money over time, it may require you to withdraw larger amounts of money.
  • If you are invested in stocks and the principal value of the assets decline, you may have less of a portfolio to withdraw from.
  • Your income needs are not likely to be as consistent as your withdrawal plan, and you may need more income in some years and less than others.

Also Check: What Is The Tax On 401k After Retirement

Is An Ira A Brokerage Account

A retirement account, often known as an IRA or individual retirement account, is a type of brokerage account that offers the same investing options as a regular brokerage account. The most significant distinction between a retirement account and a brokerage account is how the IRS treats contributions, investment gains, and withdrawals.

What Is The Teachers Insurance Annuity Association

The Teachers Insurance and Annuity Association is a financial organization that provides investment and insurance services for those working for organization in the nonprofit industry in academic, research, medical, government, and cultural fields. TIAA has a history that dates back to the late Andrew Carnegie, whose Carnegie Foundation for the Advancement of Teaching created the initial organization in order to service the pension needs of professors. The financial services company was founded in 1918 with a $1 million endowment from the Carnegie Foundation. It went by the name TIAA-CREF, short for Teachers Insurance and Annuity AssociationCollege Retirement Equities Fund, until 2016, when it rebranded under the shortened name of TIAA.

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Making A Cash Withdrawal And Tax Implications

When your RF employment ends, you may surrender your Basic Retirement Plan vested TIAA contracts for the cash value, subject to IRS regulations, if your TIAA Traditional Annuity retirement annuity accumulation is less than $2,000, and your total TIAA retirement annuity accumulation from employer-paid premiums is not over $4,000 and annuity payments have not begun, including a TIAA Transfer Payout Annuity.

Cash distributions are subject to ordinary income taxes and may be subject to an additional early withdrawal tax penalty.

TIAA must withhold 20 percent from any single sum benefit paid to you, and send it to the IRS. The IRS will apply the amount toward income taxes due.

A 10 percent tax penalty will generally apply to cash withdrawals made before age 59½, unless you have medical expenses exceeding the tax-deductible limit or you become disabled, die, or end employment after age 55. There is no tax penalty applied to payments made to children or to a divorced spouse in accordance with a qualified domestic relations order.

If you are married, your spouse must consent in writing to the cash withdrawal. For more information, refer to Selecting your beneficiary: spousal rights in the Benefits Handbook or Postdoctoral Employee Benefits Handbook.

Retirement Plan Withdrawal And Loan Information

TIAA Traditional: Income for life

Cash withdrawals are allowed from the 403 plan on or after retirement, termination or resignation, regardless of age or length of employment. You are not required to take a distribution following separation of service you may maintain your account until you are ready to receive income. However, the 403 plan is subject to Minimum Distribution Requirements as defined by the Internal Revenue Service.

Distributions are taxed as income in the year received, and may be subject to an IRS 10% penalty. You may want to consult a tax professional for advice prior to taking a distribution. To request a distribution, contact your investment vendor, for forms, procedures and available amounts.

In-service distributions from the plan are allowed only for individuals who are 59 1/2 years of age or older or due to disability.

Loans are available on this plan, under certain provisions.

Additional information is provided below:

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Tiaa Financial Consultation Sms Alerts

These text messages will occur upon registering for your financial consultation, 48 hours before your scheduled consultation, two hours before scheduled consultation, and also in the event you cancel your scheduled consultation. Text messages will not occur after your two hour appointment reminder. Only in the event that you opt in during registration for a future financial consultation will text messages reoccur. Alternatively, to discontinue receiving text messages prior to attending your financial consultation, text STOP to .

We may also use this mobile phone number to call you regarding your financial consultation. Messaging and data rates may apply contact your carrier about your plan. TIAA does not charge for this service.

Any personal information we collect from you is done with your consent. We safeguard it with physical, administrative and technical safeguards, and do not share it with any other party without your consent, except for fraud prevention purposes or in accordance with law.

Feel free to review our privacy policy at

Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.

Leaving Employment Due To Retirement

If you are retiring after age 55, you have several options for your TIAA contributions. You may:

  • If you retire after reaching age 55, the additional 10% early withdrawal penalty will not apply.
  • There are numerous withdrawal options to choose from including rollovers, withdrawals and annuities.
  • For more details, visit the TIAA website, schedule an appointment with a TIAA consultant or meet with your financial professional.

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What Other Options Are There If You Need Cash

  • If you have a Roth IRA for five years, you can withdraw your original contributions at any age, free of federal taxes and penalties.
  • For education expenses, explore scholarships or student loans. You can borrow for school but not for retirement.
  • You can borrow against the value of your home with a home equity loan or home equity line of credit.

How Do I Know If I Have A 401k Or An Ira

Tom Zwirlein on the TIAA-CREF retirement transition

When it comes to retirement planning, the terms 401 and individual retirement account are frequently used, but what exactly are the distinctions between the two? The fundamental difference is that a 401 is an employer-based plan, whereas an IRA is an individual plan, but there are other distinctions as well.

401s and IRAs are both retirement savings plans that allow you to put money down for your future. At the age of 59 1/2, you can start drawing payouts from these programs. Traditional and Roth IRAs are the two most common types of IRAs. You dont pay taxes when you make contributions to a standard IRA , because taxes are only paid when you take the money, whereas with a Roth IRA, you pay taxes up front and any gains grow tax-free. Furthermore, you must begin drawing minimum withdrawals from a traditional IRA and 401 at the age of 72 , whereas a Roth IRA has no such requirement.

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Hardships Early Withdrawals And Loans

Generally, a retirement plan can distribute benefits only when certain events occur. Your summary plan description should clearly state when a distribution can be made. The plan document and summary description must also state whether the plan allows hardship distributions, early withdrawals or loans from your plan account.

Permissible Reasons For The Withdrawal Request

A withdrawal request can be approved only if the withdrawal is for one of the six reasons outlined below. The employee must provide adequate documentation to demonstrate that the withdrawal is permissible for one or more of these reasons.

  • Unreimbursed medical expenses already incurred, or that will be incurred in the near future, by the employee, the employee’sspouse, or the employees dependents. Medical expenses include doctor’s bills, hospital bills, ambulance, dental, vision, drug,durable medical equipment, etc. More information about permissible medical expenses can be found in IRS Publication 502.
  • Acceptable documentation of medical expenses includes an Explanations of Benefits that show the nature of theexpense and the portion of the expense that is not reimbursed, bills from providers, hospitals, pharmacies, etc.
  • Amounts needed to purchase a primary residence for the employee mortgage payments are not included. The property mustbecome the primary residence of the employee within a reasonable period of time following the withdrawal. For example, a secondhome that will someday be used as a primary residence in retirement is not a primary residence for purposes of the hardshipwithdrawal.
  • Acceptable documentation of purchase of a primary residence includes a purchase contract and loan application stating thatthe residence will be primary.
  • Payments for burial or funeral expenses for the employee’s deceased parent, spouse, children or dependents.
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    Leaving Employment Before Retirement

    If you are retiring before age 55, you have several options for your TIAA contributions. You may:

    • Leave your funds in your account at TIAA.
    • Roll your funds over to another qualified retirement plan.
    • Take cash withdrawals from your account.
    • Cash withdrawals will be subject to taxation.
    • If you withdraw funds prior to age 59 ½, you may be subject to an additional 10% early withdrawal penalty.
  • For more details, visit the TIAA website, schedule an appointment with a TIAA consultant or meet with your financial professional.
  • Pay Attention To Required Minimum Distributions

    • The amount that you must take out each year depends on your age, life expectancy and year-end account balance. You may take out more than the minimum.
    • If you have multiple retirement accounts, you must calculate RMDs separately, but you can withdraw the total amount from one or many accounts.
    • Roth IRAs and most non-qualified employee-sponsored plans do not require RMDs.
    • You cant rollover RMDs into another type of tax-advantaged account.
    • If you are still working at 72, you can continue contributing to your traditional 401 or 403 or Roth 401 or 403. You don’t need to take an RMD until you separate from service. However, you will be required to take RMDs from any IRA you may own even if you are still working at 72.

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