In a post on 12-30-2006 in this thread Tim wrote the following:
"Just picking two lines from the table, for an Annuity
Beginning at Age 65, the Amount of Yearly Life Annuity to be paid for a
single premium of $100 is:
"Age Attained When Premium is Paid*...25" $16.21
"Age Attained When Premium is Paid*...55" $6.67
*Premiums
are considered to be paid, and will be credited to your certificate,
when received by TIAA at our home office in New York, NY.
That's one heck of a difference!"
This morning I phoned in and spoke with a WMA and inquired a bit about the payout for an annuity based on the Traditional Account in one of my TPA's. The TPA in question was of my 403-b Traditional Funds in my RA and as such it had vintages that went back to Sept. of 1969. I thought I would check and see what difference there would be in an annuity based on the Traditional Account from this TPA in comparison to one I could take from my IRA after I had moved funds from the REA to the Traditional Account all within the IRA.
The results are rather odd and drastically different from Tim's post. The quoted payout is based on the same dollar amount in the same TPA and there were two sets 1) for a two-life annuity with a 20 year guarantee using a) the standard payout and b) the graded payout and 2) the same two payouts from the same annuity converted (in theory) today from my IRA.
For the two-life annuity with the guarantee period and the standard payout the monthly annuity payment from the TPA was $2,556; from the IRA the same monthly annuity payment was $2,251. Note the difference is $305 per month.
Now here is the same info using the graded payout. For the same two-life annuity with the guarantee period the monthly annuity payment from the TPA was $2,205 with the monthly payout from the IRA was $2,191. Note the difference in only $14 per month.
My main point is the difference between an annuity from what was my RA Traditional funds invested over 31 years is not that much greater (13.5% more from the RA based account). My second point is a question, why is the $ difference between the graded payouts so small - only a difference of $14 per month?
Hope this makes sense; it is a bit difficult to explain and probably to follow.
Ray
