Vanguard, TIAA Team Up to Launch Target-Date CIT with Built-In Annuity
Vanguard and TIAA are teaming up to offer a target-date CIT with a built-in TIAA annuity that will only be available through 401(k) plans, the companies announced today. The collaboration brings together two trusted names in the retirement industry to deliver a retirement income solution designed to provide retirees access to a guaranteed income stream for life.
“This isn’t just another product launch, it’s the answer to what workers have been demanding and what the broader American retirement system has failed to deliver for decades.”
TIAA President and CEO Thasunda Brown Duckett
“Retirement isn’t one-size-fits-all, and for those who want more predictability, guaranteed income can provide added peace of mind alongside their savings,” said Lauren Valente, Managing Director and Head of Vanguard Workplace Solutions. “In working with TIAA, another mission-driven organization, we’re giving participants an option to turn a portion of their savings into income they can count on for life.”
Vanguard is developing a new target-date collective investment trust (CIT) series, Target Retirement Lifetime Income Trusts, that incorporates the TIAA Secure Income Account as the lifetime income annuity option. This solution adds to Vanguard’s Target Retirement lineup to support the evolving needs of Americans as they prepare for and live in retirement.
“This isn’t just another product launch, it’s the answer to what workers have been demanding and what the broader American retirement system has failed to deliver for decades,” said Thasunda Brown Duckett, president and CEO of TIAA. “When you have over 90% of workers saying they want the ability to convert their savings into guaranteed lifetime income, and nine out of 10 plan sponsors recognizing their employees need income security beyond Social Security, you’re not responding to a trend. You’re standing at the precipice of a paradigm shift. Together, TIAA and Vanguard are positioned to lead that transformation, bringing the best of low-cost investing and guaranteed lifetime income together at a major scale.”
The new solution will expand access to guaranteed retirement income through employer-sponsored plans by combining Vanguard’s five-decade legacy of delivering high-performing investment strategies with TIAA’s century-long track record as a trusted annuity provider. Updates on product design and availability will be announced throughout 2026.
“Lifetime income is in TIAA’s DNA—the company was founded in 1918 by Andrew Carnegie specifically to provide guaranteed lifetime income to American workers,” said Colbert Narcisse, Chief Product Officer and Head of Insurance Solutions & New Markets at TIAA. “This collaboration reflects our commitment to delivering forward-thinking retirement solutions that meet the evolving needs of today’s workforce. By combining Vanguard’s investment innovation with the strength and stability of TIAA’s annuities that generate lifetime income, we are making it easier for plan sponsors to offer participants a low-cost, more secure path to and through retirement.”
Valley Forge, Pa.-based Vanguard controls approximately $1.5 trillion in target-date fund assets, representing roughly one-third of the entire $4.5 trillion target-date market. To learn more about the Target Retirement Lifetime Income Trusts, click here.
Morningstar provides analysis
Morningstar released an analysis of the new collaboration today, noting that this is the first new target-date series Vanguard has launched since 2003. Morningstar said it views the move as a potentially important step for retirement solutions, helping participants turn savings into predictable income, though key challenges remain for widespread adoption.
The Morningstar analysis says the Vanguard Target Retirement Lifetime Income series follows the same glide path as the flagship funds until age 55, when it begins allocating to the TIAA Secure Income Account, a savings annuity that lets participants build up money over time and later convert it into an income stream for life backed by the insurance company. By age 65, the annuity portion will reach 25% of the portfolio, and investors can decide whether to convert that portion into lifetime income payments. This series will only be available through defined-contribution plans, such as 401(k)s.
The Morningstar analysis goes on to note the TIAA Secure Income Account carries no explicit expense ratio, so total costs are expected to be the same or lower than Vanguard’s standard Target Retirement Funds. Fees start at 0.08% for the mutual fund and can be lower for collective investment trusts, depending on plan size.
Morningstar also notes that Vanguard is not the first to combine target-date funds with annuities. BlackRock’s LifePath Paycheck, launched in 2024, has gained early traction. Its assets grew from $9 billion in May 2024 to $25.7 billion by October 2025, while other target-date funds offering annuity options increased from $1.4 billion to $3 billion. These figures do not include Alliance Bernstein’s custom target-date funds with annuities or managed accounts that incorporate annuities, such as TIAA’s RetirePlus program.
Even with growth, Morningstar adds that the $29 billion in annuity-enhanced target-date funds is still a tiny fraction of the more than $4 trillion invested in target-date strategies. Adoption is expected to remain slow because of the added complexity of annuities and the need for better education on how to use them effectively.
SEE ALSO:
• BlackRock’s LifePath Paycheck Caps 2024 with $16B
• How America Retires: New Vanguard Report Shows Most Retirees Stay In-Plan After First Year
• Coming to Transamerica: Nuveen TDFs with TIAA Lifetime Income
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
