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 SP - 39 LP - 59 DO - 10.3905/jor.2020.1.064 VL - 7 IS - 4 AU - Gabriel A. Lozada Y1 - 2020/04/30 UR - https://pm-research.com/content/7/4/39.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 9 years.• The duration and quality of TIAA’s General Account can be matched by mutual funds for which feasible historical payouts over 9 years can be inferred.• Over 1987–2015, Traditional’s 9-year payouts were second-degree stochastically dominated, reversing results using shorter-term volatility measures. ER -