Annuities vs. Mutual Funds: Fidelity and TIAA Explained

If you're a University employee, you’ve probably encountered two main retirement providers—Fidelity and TIAA. Both offer solid options, but understanding the difference between annuities and mutual funds can help clarify your best path to retirement. Let’s simplify your choices. 

Fidelity’s Robust Mutual Fund Lineup 

Fidelity’s strength lies in its extensive investment choices. They offer over 190 mutual fund options, allowing you to tailor your investments to your unique goals and risk comfort levels. Here’s what Fidelity provides: 

• Extensive Selection: Over 190 mutual fund choices covering various sectors, investment styles, and regions. 

• Flexibility: Ideal if you enjoy selecting and actively managing your investment mix. 

• Low Fees: Competitive fees, especially with low-cost index funds that help your money grow more effectively over time. 

  
  

TIAA’s Streamlined Investment Options 

TIAA, while famous for its annuity products, also offers about 30 mutual fund choices. Their approach is more streamlined, suitable if you prefer a straightforward and simplified investment experience. TIAA’s offerings include: 

• Fewer, Simpler Choices: About 30 mutual funds to avoid investment overwhelm. 

• Easy Decision-Making: Ideal if you prefer clear-cut options rather than extensive choices. 

  
  

TIAA’s Annuity Options 

Beyond mutual funds, TIAA is especially known for its annuities—investment products that offer guaranteed lifetime income, providing predictable payments throughout retirement. Key benefits include:

• Guaranteed Income: Offers stability by ensuring you never outlive your savings. 

• Market Stability: Less affected by market volatility, providing peace of mind. 

• Simplicity and Security: Ideal if predictability and steady income are top priorities. 

Side-by-Side Comparison: Fidelity and TIAA 

Fidelity Mutual Funds: 

• Pros: Diverse choices, lower fees, greater flexibility, potential for higher growth. 

• Cons: Requires active management, exposed to market fluctuations. 

TIAA Mutual Funds and Annuities: 

• Pros: Simpler choices, guaranteed lifetime income, lower market risk. 

• Cons: Fewer investment options, typically higher fees (especially on annuities), limited flexibility. 

Who Should Choose Fidelity vs. TIAA? 

• Choose Fidelity If: You prefer actively managing your investments, desire broader options, and enjoy detailed portfolio customization. 

• Choose TIAA If: You favor fewer decisions, seek guaranteed and predictable retirement income, and appreciate straightforward, stable investments. 

Questions to Help You Choose 

Ask yourself these questions: 

• Do I prefer extensive investment options or simple, straightforward choices? 

• Am I comfortable actively managing my retirement investments? 

• Is guaranteed lifetime income important to my retirement peace of mind? 

Still Unsure? Get Clear, Free Guidance! 

Making the best choice for your retirement doesn’t have to be complicated. Our free Fidelity vs. TIAA masterclass, available anytime at Learning with Provizr, clearly explains your options and helps you confidently decide. 

Start your Master Class Now!

New to comparing Fidelity and TIAA? Start with our introductory guide in the first blog post in this series: Fidelity vs. TIAA: How to Choose the Right Plan for Your Retirement. 

 Did you miss our post on how fees impact your savings? Don't miss our straightforward fee comparison: Understanding Fees: Fidelity vs. TIAA and the Impact on Your Retirement Savings.