We developed the Minimum Distribution Option (MDO)* to make it as easy as possible for you to receive annual income that satises federal minimum distribution rules. With the MDO, your accumulation will continue to pay you income for a long period of time, but not necessarily for the rest of your life because it is not a lifetime annuity.
You can receive income under TIAA-CREFs Minimum Distribution Option from TIAA Traditional and the TIAA-CREF variable accounts. The MDO will pay you the minimum amount necessary to satisfy federal rules and avoid the 50% excise tax. TIAA-CREF will calculate and pay you the minimum amount you are legally required to receive from your retirement account each year. The remainder of your accumulation will continue to earn interest in TIAA Traditional ** and participate in the investment experience of the TIAA-CREF variable accounts.
Convenience and Flexibility
If you select TIAA-CREFs Minimum Distribution Option, the following flexibilities (if available under your original contracts and/or employers plan) will continue:
- The ability to receive additional cash withdrawals and transfer funds to external sources
- Transfers among the TIAA-CREF variable accounts and to TIAA Traditional
- Transfers from TIAA Traditional to a variable account through a Transfer Payout Annuity (TPA)
To get started, complete the Minimum Distribution Option application and TIAA-CREF will do the rest. You will automatically receive the required amount of income each year, and you won't have to worry about missing federal deadlines.
* The retirement plans for employees of public colleges and universities in Illinois do not offer TIAA-CREF's Minimum Distribution Option. Participants of the Arizona Optional Retirement Plan can use another option called the Life Expectancy Option. If you participate in the college and university state retirement plan of Arizona or Illinois, you can call our Telephone Counceling Center at 1-800-842-2776 for information on the payment options available to you for minimum distribution purposes.
* *Your TIAA Traditional accumulation will continue to earn interest at the rates credited in TIAA accumulating annumities (not payout annuities).
The Minimum Distribution Option allows you to tailor your payment stream to meet your income needs.
- Select monthly, quarterly, semiannual, or annual payments
- Choose any day from the 1st to the 28th of the month for payment
- Receive part or all of the required amount earlier than your scheduled payment date
- Change any of these choices each year or at any time during the year
Once you decide how you would like to receive your payment, it can be directly deposited into your bank or investment account and you'll have:
- No worries that your check is lost or delayed
- No delays in accessing your funds because you haven't deposited your check
- No waiting for your check to clear
- No need to leave a forwarding address when you are away
Note: It may take up to 48 hours for your financial institution to credit the payment in your account.
What If I Need More Income?
If you need more income in the future, you may be able to take additional cash withdrawals if permitted by your employer's retirement plan and/or contract. You can also refer to the chart in Appendix IV for annuity conversion options from the Minimum Distribution Option.
Unlike annuity options (where the accumulation being settled purchases a lifetime annuity income stream), there will still be an accumulation value after the option has begun, so you may be able to receive additional cash distributions from your MDO contract as needed. *
* The availability of cash withdrawal options is subject to the retirement plan provisions of your contributing employer(s).