In Most Cases, Would Have Delivered Higher Account Balances at Retirement, More Guaranteed Retirement Income per Dollar, and Averaged Nearly $89,000 Larger Estate Balances
NEW YORK, Jan. 15, 2026 /PRNewswire/ — A retirement fund with part of its asset allocation to bonds replaced with an allocation to the TIAA Traditional annuity may have the potential to create better retirement outcomes and lower investment risk, according to TIAA Institute research conducted by consulting firm Charles River Associates (CRA).
This is particularly timely as January marks National Financial Wellness Month, an observance that encourages Americans to pay closer attention to their financial well-being and make resolutions for the New Year. Financial wellness encompasses not just account balances, but how individuals generate income, budget and manage their money, and plan for their future.
The research, which examines 49 years of historical data from 1973 to 2021, shows that including TIAA Traditional as a bond substitute in target-date glidepaths led to improved retirement outcomes in the vast majority of scenarios analyzed. A glidepath is a predetermined investment strategy that automatically shifts a target date solution’s asset allocation from more aggressive investments like equities to more conservative investments like bonds as the target retirement date approaches.
“As we face growing economic uncertainty, market volatility and Americans living longer in retirement, plan sponsors need solutions that can weather various economic cycles,” said Kourtney Gibson, chief executive officer of TIAA Retirement Solutions. “This research demonstrates that integrating guaranteed lifetime income into target-date portfolios has never been more essential in helping both plan sponsors and their employees build truly secure financial futures.”
This analysis was first published in 2015, with updates in 2022, 2024 and last year. The 2025 update adds three years of data to the analysis and extends the examined retirement periods to 15-30 years, more closely matching experienced retirement lengths.
CRA found that, in most cases, glidepaths with an allocation to TIAA Traditional outperformed those with an allocation only to equities and bonds – yielding higher balances at both retirement and end of life and allowing retirees to generate more guaranteed income per dollar of savings. The benefits are especially notable for plan participants whose risk tolerance would lead to higher fixed-income allocations.
The study examined 27 different retirement scenarios with varying start dates and portfolio allocations. Key findings include:
- Portfolios with TIAA Traditional had more money left over in over 93% of scenarios compared to those without it.
- On average, portfolios with TIAA Traditional had balances 4.9% higher than those without it at the end of retirement.
- The average estate value was $88,879 larger in scenarios where TIAA Traditional outperformed traditional portfolios.
- Portfolios without TIAA Traditional needed to annuitize more assets to match the guaranteed income levels provided by portfolios with TIAA Traditional.
- At the end of the saving period, portfolios with TIAA Traditional had higher savings balances than did portfolios without 63% of the time; the average extra amount was $8,127.
The research is particularly relevant given recent bond market volatility. From December 2021 to December 2024, yields on 10-year U.S. Treasury Notes increased from 1.52% to 4.58%, putting downward pressure on bond prices. During this three-year period, the Bloomberg Aggregate Bond Index provided a negative 7% return, while TIAA provided retired annuitants with increases to annuity income of 5% and 3% in 2022 and 2023, respectively. TIAA Traditional account holders still working and saving gained over 11% during the same period.
“Industry-wide, there has been discussion regarding the optimal annuitization strategy: Whether the participant should wait until retirement to annuitize some of their equity and bond assets for guaranteed income – or, instead, direct some retirement contributions over time to a target date solution with an embedded annuity, for example, TIAA Traditional,” said Surya P. Kolluri, head of TIAA Institute.
“The CRA research examined both approaches – and found that an allocation to TIAA Traditional enhanced both the overall portfolio as well as the retirement income purchase,” he said. “It may also offer the potential for improved estate planning.”
“Our research shows that replacing some of your allocation to fixed income with TIAA Traditional can lower overall risk by reducing interest-rate risk and adding stable returns – while also offering the option of guaranteed lifetime income,”1 said Gibson. “Ultimately, this helps participants be better prepared for a more secure retirement.”
TIAA’s flagship fixed annuity, TIAA Traditional, has helped millions of participants build and prepare a solid retirement foundation. It provides guaranteed growth in the saving years, meaning balances go up every day—even in the most volatile markets. When it’s time to retire, TIAA Traditional can turn savings into guaranteed monthly income for life.
How TIAA Stands Apart
TIAA has no public shareholders and seeks to give profits back to its participants through higher interest rates while saving, bigger retirement payouts through the TIAA Loyalty Bonus®, and the potential for income raises in retirement. This sets TIAA apart from other companies.2
TIAA Traditional fixed annuity is issued by Teachers Insurance and Annuity Association of America, New York, NY. TIAA Traditional owners who elect lifetime income may receive a TIAA Loyalty Bonus® and further increases in income during retirement. These additional amounts are not guaranteed beyond the period for which they were declared. Guarantees are subject to TIAA’s claims-paying ability.
About TIAA Institute
The TIAA Institute is a think-tank within TIAA, conducting cutting-edge research in the areas of financial literacy and longevity literacy, lifetime income, retirement plan design and behavioral finance in the context of retirement. The Institute provides consulting services for higher education and the broader nonprofit sector. For more information, visit www.tiaainstitute.org.
About TIAA
TIAA is a leading provider of more secure retirements and outcome-focused investment solutions to millions of people and thousands of institutionsi. It paid more than $5.9 billion in lifetime income to retired clients in 2024ii and has nearly $1.5 trillion in assets under management (as of 09/30/2025)iii.
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1 All guarantees are based on TIAA’s claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. Past performance is no guarantee of future results.
2 TIAA may share profits with TIAA Traditional Annuity owners through declared additional amounts of interest during accumulation, higher initial annuity income, and through further increases in annuity income benefits during retirement. These additional amounts are not guaranteed beyond the period for which they were declared. Lifetime income payments from TIAA Traditional may include a TIAA Loyalty BonusSM which is discretionary and determined annually.
i. Based on data in PLANSPONSOR’s 2025 DC Recordkeeping Survey published June 25, 2025.
ii. As of December 31, 2024, TIAA paid out $5.9B in total annuity income. This figure represents all annuity income, including guaranteed and additional amounts, for all of TIAA’s annuity products.
iii. As of September 30, 2025, assets under management across Nuveen Investments affiliates and TIAA investment management teams are $1,487 billion
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
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.
Annuity contracts may contain terms for keeping them in force. TIAA can provide you with costs and complete details.
TIAA Traditional is a fixed annuity product issued through these contracts by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY, 10017: Form series including but not limited to: 1000.24; G-1000.4; IGRS-01-84-ACC; IGRSP-01-84-ACC; 6008.8. Not all contracts are available in all states or currently issued.
Fixed annuities and bonds are distinct financial products. Both provide reliable credited interest and income, but may not protect against inflation. A fixed annuity is an insurance contract issued by an insurance company offering tax-deferred guaranteed interest accumulation, principal protection, guaranteed income for a specific period or for life to protect against longevity risk, and may include a death benefit. Guarantees are subject to the financial strength of the insurer. Some fixed annuities are complex, with additional benefits available for an extra cost, and have liquidity restrictions or charges. The TIAA Traditional fixed annuity expenses are reflected in its credited rate – there are no additional fees and charges. TIAA may increase income throughout retirement. A bond is a market-based investment issued for a specified duration that is more liquid than most annuities, has transparent pricing/yield data, disclosed expenses, and is subject to credit risk of the issuer. There is a wide variety of credit qualities and maturities available and flexibility in choice of issuer, maturity, and duration. Principal is usually returned upon maturity, but bond value can fluctuate and be subject to volatility risk due to interest rate changes, market sentiment and bond duration sensitivity. Income from some bonds may be tax-exempt. Bonds do not protect against the risk of outliving your savings and include risk you cannot reinvest at similar/better rates when a bond matures. Bonds have no death benefit but can be passed directly to heirs with a step-up basis.
The Bloomberg U.S. Aggregate Bond Index reflects the average experience (including expenses) of only the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. Over the long-term, the credited interest rates of TIAA Traditional have been similar to returns of this Index, with less volatility due to the diversified investments of TIAA’s large general account which support TIAA’s fixed annuity credited rate, and which invests in nearly every type of portfolio asset available in the market, not just the bond market. You cannot invest in an index; nor can you invest in TIAA’s general account.
Any guarantees under annuities issued by TIAA are subject to TIAA’s claims-paying ability. Past performance is no guarantee of future results.
TIAA Institute is a division of Teachers Insurance and Annuity Association of America (TIAA), New York, NY. ©2025 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, New York, NY
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SOURCE TIAA Institute
