living well in retirement Adjusting Your Annuity Income Your Payment Flexibilities

Transcription

1 livig well i retiremet Adjustig Your Auity Icome Your Paymet Flexibilities

2 what s iside 2 TIAA Traditioal auity Icome 4 TIAA ad CREF Variable Auity Icome 7 Choices for Adjustig Your Auity Icome 7 Auity Icome Trasfers 19 TIAA Traditioal Paymet Methods 20 variable Auity Icome that chages aually or mothly 24 Should You Make A Chage? 25 We re Here to Help 25 Whe ad How to Make A Chage TIAA-CREF: fiacial Services for the Greater Good TIAA-CREF is dedicated to servig the retiremet eeds of those i the academic, medical, cultural ad research fields. We are committed to seekig cosistet, log-term performace ad solid returs. We keep our fees low* to help our participats maximize their ivestmets ad esure more of their moey is workig hard for them. We offer persoalized, objective advice by highly traied cosultats ad, most importatly, we leverage our kowledge ad expertise to provide retiremet icome solutios that guaratee our participats wo t outlive their icome.** ** Morigstar Direct (September 2010) based o Morigstar expese comparisos by category. This applies to our variable auity ad mutual fud expese ratios. ** Guaratees are based o the claims-payig ability of the issuer.

3 retiremet icome flexibility You eed ivestmet ad icome flexibility whe you are receivig auity icome just as you do whe you are accumulatig assets. TIAA-CREF offers several ways to reallocate your auity icome. This booklet describes the chages you ca make while you re receivig auity icome, icludig: g Trasferrig from oe variable accout to aother or to the TIAA Traditioal Auity g Trasferrig from the TIAA Traditioal Auity to the CREF equity variable auity accouts g Chagig TIAA Traditioal paymet methods g Receivig variable icome that chages aually or mothly This booklet also discusses how these chages ca affect your paymets ad offers some factors to cosider whe decidig whether to make a chage. Whe you bega receivig lifetime auity icome you made several importat decisios some irrevocable about how to receive your TIAA-CREF paymets. You chose a auity icome optio. You decided if you wated someoe else, typically a spouse, to cotiue to receive icome upo your death. You decided whether or ot icome should cotiue to a beeficiary if both you ad your auity parter die durig a guarateed period. Ad you selected the source(s) of your auity icome: from TIAA Traditioal uder the Stadard or Graded Paymet Method, ad/or from the TIAA-CREF variable auity accouts. To cofirm your auity icome optio(s) ad auity parter (also called your secod auitat), please call us at Cosultats are available Moday to Friday from 8 a.m. to 10 p.m. ad Saturday from 9 a.m. to 6 p.m. (ET).

4 May of you may receive auity icome for 20 or 30 years or loger. Your iitial choices for receivig icome may ot be appropriate for the etire time period. For example, your attitude toward ivestmets may chage over time. You may wat to chage the accouts from which you receive icome i respose to geeral ecoomic coditios or a chage i your risk tolerace, or because ew TIAA-CREF ivestmet accouts became available. Or you may wat to chage how your icome is paid as your persoal circumstaces chage. You ca chage the sources of some of your TIAA-CREF icome as well as adjust your paymet streams by chagig the way your paymets are made. These flexibilities offer you the opportuity to achieve a comfortable balace betwee growth potetial ad stability today, without beig totally locked i for the future. Before discussig the flexibilities available to you i more detail, let s review how TIAA Traditioal Auity icome ad TIAA ad CREF variable auity icome paymets are calculated. TIAA Traditioal auity Icome The TIAA Traditioal Auity guaratees a miimum level of icome that ca ever be reduced.* TIAA Traditioal icome is calculated usig a guarateed iterest rate, a specified mortality table, ay additioal amouts above the guarateed rate that are declared for the ext year as determied aually by TIAA s Board of Trustees, ad the paymet methods chose. The two TIAA Traditioal paymet methods, Stadard ad Graded, provide differet paymet streams because they pay additioal amouts differetly. The Stadard Paymet Method pays you the total payout rate (guarateed iterest plus all additioal amouts) with each paymet; the Graded Paymet Method pays you part of the additioal amouts ow ad uses the rest to icrease your icome i the future. * Ay guaratees are backed by TIAA s claims-payig ability. 2

5 STANDARD PAYMENT METHOD Uder the Stadard Paymet Method, iitial icome icludes a basic guarateed iterest rate (geerally 2 1 /2%) that does t chage, plus additioal amouts over ad above the guarateed rate. Your icome ca chage each year effective Jauary 1, based o the total payout rate (guarateed iterest plus additioal amouts) voted o by TIAA s Board of Trustees, but it will ever go below the guarateed (cotractual) amout. graded PAYMENT METHOD Uder the Graded Paymet Method, iitial icome is based o a 4% payout rate. This icludes the same guarateed iterest rate (geerally 2 1 /2%) as uder the Stadard Method. However, istead of payig out all the additioal amouts, we pay you a portio (based o a 4% total payout rate) ad reivest the rest to buy you additioal future icome. Icome will icrease Jauary 1 as log as the TIAA total payout rate is based o a total iterest rate that exceeds 4%. The availability of the Graded Paymet Method varies by vitage, ad is oly available for the vitages which at issue are credited with at least 4%. Icome arisig from lifetime payout auity vitages with first-year iterest rates below 4% will oly be payable uder the Stadard Beefit Paymet Method. Icome uder the Graded Method has icreased almost every year sice it was itroduced i 1982, although icreases are ot guarateed. Your curret paymets uder the Stadard Method may or may ot be the same as your iitial paymets, depedig o the total payout rate (cotractual iterest plus additioal amouts) i effect or trasfers you made sice you started receivig icome. Uless you switched some auity icome from the Graded Method to the Stadard Method or trasferred from the Graded Method to the CREF equity accouts, your paymets uder the Graded Method ow are higher tha whe you started icome. Your paymets will cotiue to icrease every Jauary 1 as log as the total payout rate (cotractual iterest plus additioal amouts) is greater tha 4%. 3

6 * Ay guaratees are backed by TIAA s claims-payig ability. TIAA ad CREF Variable Auity Icome aual icome chages If you receive variable auity icome that chages aually, your icome is revalued oce a year o March 31. Icome is iitially calculated usig a 4% aualized assumed ivestmet retur (AIR) ad is adjusted every May 1 to reflect the actual performace of the variable accout(s) for the prior 12-moth period edig March 31, as compared with the 4% AIR. To the extet earigs are greater tha 4%, icome from a particular accout will go up; if earigs are less tha 4%, icome goes dow.* MONTHLY INCOME CHANGES If you receive variable auity icome that chages mothly, your icome is revalued o the 20th of every moth (or the previous busiess day if the 20th is ot a busiess day). Icome is iitially calculated usig the same 4% aualized AIR, ad is adjusted each moth to reflect the actual performace of the variable accout(s) for the previous moth, as compared with the mothly equivalet of a 4% AIR. To the extet aualized earigs are greater tha 4%, icome from a particular accout will go up; if aualized earigs from the accout are less tha 4%, icome goes dow.* * While other factors (such as chages i mortality rates ad expese charges) ca impact your icome, these factors are geerally isigificat. Your variable auity icome ca be adjusted aually or mothly, or you ca have a portio adjusted aually ad the rest adjusted mothly. Eve if you start out oe way, you ll have the opportuity to switch some or all of your icome to the other method i the future. See page 20 for more iformatio o switchig betwee aual ad mothly icome chages. 4

7 ONE ACCOUNT TWO ANNUITY UNIT VALUES All variable accouts have two separate uit values or prices oe for icome that chages aually ad oe for icome that chages mothly. Although choosig icome that chages aually or mothly would provide you with differet paymet streams over a 12-moth period, you are participatig i the same accout ad sharig i the ivestmet performace of the same uderlyig assets. You Ca choose from Amog the followig Variable Accouts: CREF accouts Equities Stock Equity Idex Global Equities Growth Equities ad Fixed Icome Social Choice Moey Market Moey Market TIAA Real Estate Access Auity Fixed Icome Iflatio-liked Bod Bod Market 5

8 choosig betwee aual ad mothly icome chages Icome that chages aually Icome that chages Mothly May be suitable if you prefer to have a cosistet icome stream for a oe-year period; or do t mid waitig util the followig May 1 to receive a icrease i icome if performace is above the 4% AIR (or a decrease if performace is below the 4% AIR). May NOT be suitable if you thik performace may be above the 4% AIR durig the year, ad wat to see the effect o your icome immediately, rather tha waitig util the followig May 1; or wat trasfers to aother variable accout to be reflected i your icome immediately rather tha waitig util the followig May 1. May be suitable if you prefer to see chages i icome (up or dow) immediately, rather tha waitig util the followig May 1; or thik performace may be above the 4% AIR durig the year, i which case your icome could go up from moth to moth. May NOT be suitable if you wat the ability to pla ahead ad kow your paymet amout from oe moth to the ext; or thik performace may be below the 4% AIR durig the year, i which case your icome could go dow from moth to moth. 6

9 Auity icome trasfers TRANSFERS FROM THE TIAA ad CREF VARIABLE ACCOUNTS You ca trasfer from ay TIAA ad CREF variable accout to aother variable accout or to TIAA Traditioal o ay busiess day. This eables you to secure gais from a variable accout by movig to a fud with a guarateed elemet, respod to chagig ecoomic coditios, ad rebalace your asset allocatio whe you feel it is appropriate. Your request ca be stated as a percetage of icome from a accout, ay whole dollar amout of icome, or a umber of auity uits (for variable auities). There is o miimum trasfer amout or trasfer fees. Choices for adjustig your auity icome You ca chage how your retiremet assets are ivested or paid i the followig ways: Auity icome trasfers trasfer o ay day amog variable accouts* from ay variable accout to TIAA Traditioal usig the Stadard Paymet Method ad/or Graded Paymet Method* from TIAA Traditioal to the CREF equity accouts** TIAA Traditioal paymet methods chage from the Graded Method to the Stadard Method o ay day* Variable Icome that chages aually or mothly switch betwee aual ad mothly icome chages o March 31 ** Limited to oe trasfer from each variable accout or from the Graded to Stadard Method each caledar quarter ** Up to 20% of your TIAA Traditioal payout auity to CREF each year or your etire TIAA Traditioal icome to the CREF accouts i equal istallmets over a five-year period. 7

10 Note: You ca trasfer from a variable accout withi each cotract you have as ofte as oce per caledar quarter. However, if you re receivig icome from a accout with some of your icome chagig aually ad some chagig mothly, this is treated as two separate accouts. For iformatio o TIAA Traditioal ad the TIAA ad CREF variable auity accouts icludig accout descriptios ad historical performace, please visit our website tiaa-cref.org, or call us at Moday to Friday from 8 a.m. to 10 p.m. ad Saturday from 9 a.m. to 6 p.m. (ET). Please keep i mid that past performace does ot guaratee future results. 8

11 For example, i the same caledar quarter you ca trasfer: CREF Stock icome that chages aually to aother variable accout (with that icome cotiuig to chage aually) or to TIAA Traditioal AND CREF Stock icome that chages mothly to aother variable accout (with that icome cotiuig to chage mothly) or to TIAA Traditioal Trasfers ca be made betwee matchig auities oly. This meas that both the auity you re trasferrig from ad the auity you re trasferrig to must have the same auity icome optio, auity parter, ad remaiig guarateed period, if ay. For example, if you wat to move some of your CREF icome to TIAA Traditioal or TIAA Real Estate ad you do t have a TIAA auity that matches your CREF auity, you ll eed to complete a applicatio. Call us at Moday to Friday from 8 a.m. to 10 p.m. ad Saturday from 9 a.m. to 6 p.m. (ET), if you re usure that you ll eed to complete a applicatio. The origial applicatio, with your sigature, must be received before we ca complete the trasfer. THE EFFECT ON YOUR INCOME Trasfers are effective at the ed of the busiess day o which we receive your request (uless you request a future effective date). Whe ad how your icome chages depeds o the trasfer you request. Remember: Auity icome optios ad the perso you desigate as your auity parter caot be chaged. Note: If you have several auities, you may have differet beeficiaries for each oe. If you wat to trasfer ad you fall ito this category, please let us kow whe you call. 9

12 Variable icome that chages aually If you re receivig icome that chages aually, your icome stays the same for a year, regardless of whether you trasfer to aother accout. If you trasfer from oe variable auity accout to aother uder this method, you begi participatig i the ivestmet experiece of the ew accout after the close of busiess o the trasfer date. However, your icome is ot revalued util the followig March 31. Istead of calculatig your icome based o the performace of the origial accout oly, your icome as of May 1 will reflect the origial accout s performace through the trasfer date ad the performace of the ew accout after the trasfer date through March 31. Here s a example If your icome chages aually ad you trasfer from CREF Stock to CREF Bod Market o November 14, 2011, your paymets will stay the same through April Your paymet begiig May 1, 2012 will reflect participatio i the Stock Accout from April 1, 2011 through November 14, 2011 ad the Bod Market Accout from November 15, 2011 through March 31, March 31, 2011 Icome will be calculated based o the participatio ad performace for the previous 12 moths ad payable for 12 moths begiig May 1, November 14, 2011 Trasfer of icome that chages aually from the Stock Accout to the Bod Market Accout. December 1, 2011 April 1, 2012 Cotiue receivig paymets i the same amout as before the trasfer. March 31, 2012 Variable accouts for icome that chages aually are revalued. May 1, 2012 Icome chages to reflect participatio i the Stock Accout from April 1, 2011 through November 14, 2011 ad the Bod Market Accout from November 15, 2011 through March 31,

13 Variable icome that chages mothly If you re receivig variable icome that chages mothly, your icome is revalued o the 20th of each moth (or the previous busiess day if the 20th is ot a busiess day) ad chages with each paymet. Whe you trasfer amog variable accouts usig this method, you begi participatig i the ew accout after the close of busiess o the trasfer date. However, depedig o whether you trasfer before or after a revaluatio date, you will see the effect of the trasfer i your ext paymet or the followig paymet. Here s a example if you trasfer BEFORE the revaluatio date: If your icome chages mothly ad you trasfer from CREF Stock to CREF Bod Market o November 14, 2011 before the revaluatio date your December 1 paymet will reflect participatio i the Stock Accout (the origial accout) from October 21, 2011 through November 14, 2011 ad participatio i the Bod Market Accout (the ew accout) from November 15, 2011 through November 18, November 1, 2011 Icome based o the Stock Accout performace from September 21 through October 20. November 14, 2011 Trasfer icome that chages mothly from the Stock Accout to the Bod Market Accout. November 18, 2011 Variable accouts for icome that chages mothly are revalued based o performace sice October 20. December 1, 2011 Icome chages to reflect participatio i the Stock Accout from the previous October 21 through November 14, ad the Bod Market Accout from November 15 through November

14 Variable icome that chages mothly cotiued Here s a example if you trasfer after the revaluatio date: If your icome chages mothly ad you trasfer from CREF Stock to CREF Bod Market o October 27, 2011 after the revaluatio date your November 1 paymet will reflect participatio i the Stock Accout oly. However, your December 1, 2011 paymet will reflect participatio i the Stock Accout (the origial accout) from October 21, 2011 through October 27, 2011 ad participatio i the Bod Market Accout (the ew accout) from October 28, 2011 through November 18, October 20, 2011 Variable accouts for icome that chages mothly are revalued based o performace sice September 20. October 27, 2011 Trasfer of icome that chages mothly from the Stock Accout to the Bod Market Accout. November 1, 2011 Icome chages to reflect participatio i the Stock Accout from September 21 through October 20. November 18, 2011 Variable accouts with icome that chages mothly are revalued based o performace sice October 20. December 1, 2011 Icome chages to reflect participatio i the Stock Accout from October 21 through October 27, ad the Bod Market Accout from October 28 through November

15 TRANSFERs FROM VARIABLE ACCOUNTS TO TIAA TRADITIONAL May be suitable if you wat lower risk; wat guarateed icome; wat icome that remais the same from moth to moth ad does ot chage dramatically from year to year; wat to lock i gais from ivestmet performace of the variable accouts; ad expect variable auity accout performace to decrease May NOT be suitable if you may wat to trasfer back to a oequity variable accout i the future; wat the opportuity for sigificat icreases i icome over the log term; ad wat log-term, iflatio-protectio potetial associated with equity ad real estate accouts* * the Graded Paymet Method may provide iflatio protectio by payig oly part of TIAA Traditioal s total payout rate to you ad usig the rest to icrease your future icome. TRANSFERS AMONG THE TIAA ad CREF VARIABLE ACCOUNTS Trasferrig icome from oe variable accout to aother decreases the umber of uits i the origial accout ad icreases the umber of auity uits i the ew accout. What you are doig is sellig uits from your curret accout ad buyig uits i the ew accout at the curret price. Each accout has a differet uit value or price depedig o its ivestmet performace. 13

16 TRANSFERS FROM THE TIAA ad CREF VARIABLE ANNUITY ACCOUNTS TO TIAA TRADITIONAL With this type of trasfer, you sell uits i the TIAA ad CREF variable auity accouts at their curret price to buy a ew icome stream from the TIAA Traditioal Auity. The amout of your icome from TIAA Traditioal will be based o the value of the variable accout auity uits you sold, TIAA s total payout rate (guarateed iterest plus additioal amouts) curretly i effect, the mortality table i effect, ad the TIAA Traditioal paymet method. Keep i mid that all auity paymets are calculated o the 20th of the moth (or the previous busiess day if the 20th is ot a busiess day). Regardless of whether your icome chages aually or mothly, if you trasfer from a variable accout to TIAA Traditioal before this cutoff date, you will see the chage i your icome i the ext paymet. However, if you trasfer after the cutoff date, you will see the effect of the trasfer i the subsequet paymet. (This is similar to trasfers from variable icome that chages mothly, as described o the previous pages.) Trasferrig icome from a TIAA ad CREF variable accout to TIAA Traditioal usig the Stadard Paymet Method may icrease icome immediately because you will receive TIAA s icome based o the total payout rate (the guarateed iterest plus additioal amouts).* Please ote that the amout of icome you buy uder the Stadard Paymet Method also depeds o the value of the uits you sold. Therefore, the performace * if you trasfer from a CREF variable accout to TIAA s Graded Method, your icome may chage slightly because icome from TIAA ad icome from CREF are based o differet mortality tables. Trasfers to TIAA Traditioal could chage your tax withholdig. We will provide withholdig iformatio whe you call to request a trasfer. Please call us at Cosultats are available Moday to Friday from 8 a.m. to 10 p.m. ad Saturday from 9 a.m. to 6 p.m. (ET). 14

17 of the variable accout through the trasfer date will directly affect the amout of TIAA Traditioal icome you purchase. If you trasfer from a TIAA ad CREF variable auity accout to TIAA Traditioal usig the Graded Paymet Method you ll receive icome based o a 4% payout iterest rate (the same as the 4% AIR for the variable auity accouts), with additioal amouts above the 4% rate used to icrease your icome every caledar year as of Jauary 1.* However, the amout of icome you buy uder the Graded Paymet Method also depeds o the value of the uits sold. Therefore, the performace of the variable auity accout through the trasfer date will directly affect the amout of TIAA Traditioal icome you purchase. If the total TIAA Traditioal payout iterest rate (guarateed iterest plus additioal amouts) is above the 4% rate, the Stadard Method will iitially TRANSFERs FROM TIAA TRADITIONAL to the cref equity accouts May be suitable if you curretly receive most or all of your icome from TIAA Traditioal ad wat to diversify the sources of your icome; always wat at least some of your icome to be from the CREF equity accouts; ad are willig to assume additioal risk i exchage for the growth potetial that equity accouts may offer. May NOT be suitable if you eed icome that has a guarateed elemet; already have a sigificat portio of your assets ivested i equities; ad thik you may wat to trasfer out of the equity accout i the future. 15

18 provide higher icome tha the Graded Method because all additioal amouts are paid to you with each paymet. Over time, though, the Graded Method may catch up to ad evetually surpass the Stadard Method. TRANSFERS FROM TIAA TRADITIONAL TO THE CREF EQUITY ACCOUNTS You ca covert a portio of your TIAA Traditioal Auity icome to the CREF equity accouts icludig the Stock, Social Choice, Global Equities, Equity Idex, ad Growth Accouts. You ca trasfer from your TIAA Traditioal cotract i two ways: up to 20% of your TIAA Traditioal payout auity to CREF each year or your etire TIAA Traditioal icome to the CREF accouts i equal istallmets over a five-year period. This trasfer optio may be especially useful if you are curretly receivig all of your retiremet icome from TIAA Traditioal. It provides you with a way of diversifyig your icome ad gives you the opportuity to participate i the growth potetial offered by the equity markets. Of course, returs from equities fluctuate, which meas your icome from a CREF variable accout ca go up or dow. Trasfers from TIAA Traditioal will go to a ew, separate CREF Equities certificate that icludes the Stock, Social Choice, Global Equities, Equity Idex, ad Growth Accouts, but does ot iclude the CREF Moey Market, Bod Market, ad Iflatio-Liked Bod Accouts. Oe trasfer ca be made from a specific TIAA Traditioal payout auity per caledar year. (If you re receivig TIAA Traditioal icome from more tha oe cotract, you ca trasfer from each cotract oce a year.) Participats receivig a portio of their TIAA icome uder the Stadard Method ad a portio uder the Graded Method ca elect to trasfer from either or both portios of their TIAA auity. 16

19 The CREF Equities certificate will have the same icome optio, auity parter (if ay), ad remaiig guarateed period (if ay), as the TIAA Traditioal cotract from which you are trasferrig. After trasferrig from TIAA Traditioal to the CREF equity accouts, you caot subsequetly trasfer that icome back to TIAA Traditioal or to the oequity variable accouts TIAA Real Estate, CREF Moey Market, CREF Bod Market, ad CREF Iflatio-Liked Bod Accouts. However, you ca trasfer amog the equity accouts. THE EFFECT ON YOUR INCOME Whe you trasfer from TIAA Traditioal to a CREF equity accout, you are i effect exchagig a portio of your curret TIAA Traditioal icome stream for a CREF variable auity icome stream. The future paymet levels of your variable icome will reflect the ivestmet performace of the CREF equity accouts you choose. The effect a trasfer has o your icome geerally depeds o whether you are trasferrig from the Stadard or Graded Paymet Method. The exact chage i your icome will deped o a umber of factors icludig your age, icome optio, ad whe fuds were origially applied to your TIAA Traditioal Auity. Depedig o the total payout rate used for TIAA s Stadard Paymet Method, your icome may iitially declie if you trasfer from the Stadard Method to CREF sice iitial icome paymets uder the CREF variable accouts are based o a 4% assumed ivestmet retur. If you decide to trasfer from TIAA Traditioal to the CREF equity accouts, you will choose the accouts from which you would like to receive icome ad how ofte you would like your CREF variable icome revalued. For each CREF equity accout you select, you ca opt to have all of your icome chage aually, all of your icome chage mothly, or a mix of both. For more iformatio o mothly ad aual icome chages, see page 6. 17

20 Icome uder TIAA s Graded Paymet Method is also based o a 4% assumed iterest rate. Sice we use the same 4% rate for both TIAA graded paymets ad CREF variable auity icome (although the mortality tables are somewhat differet), you may geerally see less of a chage i your icome if you trasfer from the Graded Method to CREF. While TIAA Traditioal icome has a guarateed elemet ad the potetial for higher icome from additioal amouts (which are ot guarateed), icome from the CREF equity accouts is variable ad has o guaratees. After your iitial paymets, your variable icome will chage either aually or mothly (whichever you select) based o the ivestmet experiece of the accout. Icome ca icrease or decrease, sometimes sigificatly, from period to period. Ad keep i mid that past performace is ot a guaratee of future results. I effect, by trasferrig from TIAA Traditioal you will give up the guarateed icome ad potetial future TIAA additioal amouts for the opportuity to participate i the CREF equity accouts. Whe decidig whether to trasfer from TIAA Traditioal, keep i mid that future variable auity icome is based o ivestmet performace, ad there is o guaratee that your variable icome will equal or surpass the icome you were receivig from TIAA Traditioal before the trasfer. Sice a trasfer from TIAA Traditioal to the CREF equity accouts is irrevocable, you should evaluate both the potetial risks ad rewards of icreasig your exposure i the equity markets whe cosiderig this type of trasfer. Keep i mid that paymets are calculated o the 20th of the moth (or the previous busiess day if the 20th is ot a busiess day). If you trasfer from TIAA Traditioal to the CREF equity accouts before this cutoff date, you will see the chage i your icome i the ext paymet. However, if you trasfer after the cutoff date, you will see the effect i the subsequet paymet. 18

21 Chagig from the Graded to stadard paymet method May be suitable if you wat icome that is basically steady from year to year; ad, to icrease curret icome. May NOT be suitable if you wat log-term iflatio protectio; ad, to go back to the Graded Method i the future. TIAA Traditioal paymet Methods By chagig TIAA Traditioal paymet methods from Graded to Stadard, you switch from receivig part of TIAA Traditioal s additioal amouts ad havig TIAA reivest the rest, to receivig the full additioal amouts with each paymet. TIAA Traditioal additioal amouts are subject to chage i the future, ad your icome, therefore, may chage every Jauary 1. You ca make a chage o ay day. Your request ca be a percetage of icome, or ay whole dollar amout of icome; there are o miimum amouts or trasactio fees. THE EFFECT ON YOUR INCOME If you chage from the Graded Method to the Stadard Method, your TIAA Traditioal icome may icrease right away, depedig o TIAA s total payout rate. By movig to the Stadard Method, you will chage from receivig part of TIAA s additioal amouts to receivig icome based o TIAA s total payout rate, icludig all additioal amouts. Keep i mid that paymets are calculated o the 20th of each moth (or the previous busiess day if the 20th is ot a busiess day). If you switch paymet methods before this cutoff date, you will see the chage i your icome i the ext paymet. However, if you switch after the cutoff date, you will see the effect i the subsequet paymet. 19

22 Variable Auity Icome That Chages Aually or Mothly You ca chage whe your variable auity icome gets revalued from aually to mothly, ad vice versa. For example, if you re receivig icome from the CREF Stock Accout, you ca switch from receivig stock icome that chages oce a year to stock icome that chages every moth. By switchig whe your paymets are revalued, you affect the paymet stream for icome you re receivig from a particular variable auity accout. You ca make a switch oce a year, effective o March 31. We ca accept requests to switch methods util the close of busiess (the close of the New York Stock Exchage, usually 4 p.m. (ET)) o the last busiess day i March. For example, if March 31 is a Suday, we would have to receive your request by the close of busiess o Friday, March 29. Your request ca be for a percetage of icome, ay whole dollar amout of icome, or a umber of auity uits from a accout; there are o miimums or trasactio fees. THE EFFECT ON YOUR INCOME If you switch from aual to mothly icome chages, you sell auity uits at their value o March 31 ad purchase uits i the same accout, but they are revalued mothly. Your May 1 paymet will reflect the revaluatio of the fud that chages aually (as of March 31), ad the performace of the fud that chages mothly from April 1 through April 20. Paymets will chage every moth after that. SAME ACCOUNT DIFFERENT PAYMENT STREAM By switchig from aual to mothly icome or vice versa, you are chagig the way icome is paid from a particular accout; you are NOT chagig the accout from which you are receivig icome. Please see page 6 for factors to cosider whe decidig whether to receive icome that chages aually or mothly. 20

23 If you switch from mothly to aual icome chages, you sell uits at their value o March 31 ad purchase uits i the same accout that are based o a mothly re-evaluatio. Begiig May 1, you will receive paymets that chage aually. Your icome will remai the same every moth through the followig April 1. Remember: Requests to switch from variable icome that chages aually to icome that chages mothly (or vice versa) are effective oce a year o March

24 REVIEWING YOUR INCOME FLEXIBILITIES FROM 1 A TIAA ad CREF Variable Auity Accout With Icome That Chages Aually TO ay other variable accout with icome that chages aually; TIAA Traditioal usig the Stadard Paymet Method; TIAA Traditioal usig the Graded Paymet Method; ad, the same accout with icome that chages mothly. TIAA Traditioal Graded Paymet Method A TIAA ad CREF Variable Auity Accout With Icome That Chages Mothly TIAA Traditioal usig the Stadard Paymet Method. ay other variable auity accout with icome that chages mothly; TIAA Traditioal usig the Stadard Paymet Method; TIAA Traditioal usig the Graded Paymet Method; ad, the same accout with icome that chages aually. TIAA Traditioal Stadard or Graded Paymet Method ay of the CREF equity accouts, with icome that chages aually or mothly. 1 You ca trasfer from a variable accout ad move from TIAA s Graded to Stadard Method as ofte as oce per caledar quarter. Trasfers from TIAA Traditioal to the CREF equity accouts are available oce per caledar year. You ca also switch betwee aual ad mothly icome chages oce a year, effective o March we ca accept requests o ay day; however, trasactios are effective o a busiess day. Trasfer requests received after the close of busiess or o a obusiess day are effective the 22

25 Effective 2 ay day effect o Icome stays the same through the followig April 3 ay day chages with the ext paymet 4 ay day chages with the ext paymet 4 March 31 chages as of the followig May 1 ay day chages with the ext paymet 4 ay day chages with the ext paymet 4 ay day chages with the ext paymet 4 ay day chages with the ext paymet 4 March 31 chages as of the followig May 1 ay day chages with the ext paymet 4 ext busiess day. Requests to switch betwee aual ad mothly icome chages must be received by the close of busiess o the last busiess day of March. 3 If you trasfer betwee April 1 ad April 30 you will see a chage o May 1 of the followig year. 4 Paymets are recalculated o the 20th of each moth (or the previous busiess day if the 20th is ot a busiess day). If your trasactio takes place after the cutoff date, you will ot see the effect of the trasactio i the ext paymet, but i the followig oe. 23

26 Should you make A chage? Persoal circumstaces are uique, so oly you ca decide whether a chage is appropriate or ecessary. Whether you re cosiderig: trasferrig amog variable auity accouts or from a variable auity accout to TIAA Traditioal, trasferrig from TIAA Traditioal to the CREF equity accouts, chagig TIAA Traditioal paymet methods, or switchig variable auity icome from aual to mothly chages (or vice versa) you should weigh the advatages ad disadvatages of makig a chage ad determie what is best for you. Remember, with most of these trasactios, if you make a chage ad later recosider, you ca make aother chage ad go back to the origial accout. The oly exceptios are trasfers from TIAA Traditioal to the CREF equity accouts ad movig from TIAA Traditioal s graded to stadard method. If you are comfortable with your curret icome sources ad the way your icome is paid, you do t have to do aythig ow. If you decide later to chage the sources of your icome or the paymet stream, you may have the opportuity to do so. 24

27 We re here to help Makig decisios ca be difficult. But you do t have to decide aloe. We re here to help you uderstad your choices ad to help you arrive at the decisio that s best for you. You ca call TIAA-CREF s Telephoe Couselig Ceter at to speak to a cosultat for more iformatio, to help you review your curret situatio i preparatio for a trasfer or paymet method chage or switch betwee aual ad mothly icome chages, or to execute your istructios. WHEN AND HOW TO MAKE A CHANGE To request a trasfer, a chage i TIAA Traditioal paymet methods, or switch betwee aual ad mothly icome chages, call us at Moday to Friday from 8 a.m. to 10 p.m. ad Saturday from 9 a.m. to 6 p.m. (ET), ad our cosultats will be available to help you. After your trasactio has bee completed, we ll sed you a cofirmatio statemet. You ca chage or cacel your request aytime util the close of busiess o the effective date of the request. We ll implemet the last request we have as of the close of busiess o that day. All TIAA-CREF Ivestmet products are subject to market ad other risk factors. This booklet must be preceded or accompaied by a curret prospectus.

28 Ivestmet products are ot FDIC isured, are ot bak deposits or bak guarateed, ad may lose value. TIAA-CREF Idividual & Istitutioal Services, LLC ad Teachers Persoal Ivestors Services, Ic. members FINRA, distribute securities products. Auity cotracts ad certificates are issued by Teachers Isurace ad Auity Associatio (TIAA) ad College Retiremet Equities Fud (CREF), New York, NY Teachers Isurace ad Auity Associatio College Retiremet Equities Fud (TIAA-CREF), New York, NY Prited o 10% post-cosumer recycled fiber C49506 A9813 (12/10)