TY - JOUR T1 - Fixed Income for Retirement Saving<em>: TIAA Traditional’s Lessons on Quality, Duration, Risk, and Gradual Withdrawals</em> JF - The Journal of Retirement DO - 10.3905/jor.2020.1.064 SP - jor.2020.1.064 AU - Gabriel A. Lozada Y1 - 2020/03/13 UR - https://pm-research.com/content/early/2020/03/13/jor.2020.1.064.abstract N2 - TIAA’s Traditional annuity has supported retirements for a century. It resembles a stable-value fund. The author investigates the holdings supporting it, constructs readily available alternatives resembling those holdings, compares the returns of those alternatives with Traditional, and constructs a new measure of risk to compare Traditional’s risk with that of its alternatives in a more appropriate way than by using short-term standard deviation of returns. Under this new measure of risk, which is appropriate for retirement investors, some alternatives exhibited second-degree stochastic dominance over Traditional using 1987–2015 data. However, Traditional may still be a better choice for unsophisticated investors.TOPICS: Retirement, portfolio construction, legal/regulatory/public policyKey Findings• TIAA has reported Traditional Annuity’s returns in nonstandard, sometimes incorrect ways. Its short-term volatility is irrelevant because withdrawals require nine years.• The duration and quality of TIAA’s General Account can be matched by mutual funds whose feasible historical payouts over nine years can be inferred.• Over 1987–2015 Traditional’s nine-year payouts were second-degree stochastically dominated, reversing results using shorter-term volatility measures. ER -