Third Quarter Update from TIAA-CREF CEO Roger Ferguson

Roger W. Ferguson, Jr.
Roger W. Ferguson, Jr.

Dear TIAA-CREF Participant:

In this update, I'll discuss how TIAA-CREF is here to help you with solid investment performance, objective advice, and some new tools.

Investment Performance

TIAA-CREF continues to pursue a time-tested strategy of investing for the long term, keeping a watchful eye on risk, and giving you the opportunity to diversify your savings.

Financial markets improved in the third quarter, with the Dow Jones Industrial Average rising 10.4% and the S&P 500 up 10.7%. These gains helped to boost the CREF Stock Account, which grew by 11.5% in the quarter and has an average annualized return of 9.7% since its 1952 inception.

From the beginning of 2010, assets in TIAA-CREF mutual funds have grown by close to 20%, to nearly $30 billion, representing gains from market growth as well as participants moving more of their money to the accounts.

As of September 30th, nearly 98% of our variable annuities and mutual funds had an overall Morningstar rating of three (75%), four (17.4%), or five (5.4%) stars for the three-year period.i

CREF Stock Account Average Annual Total Returns as of September 30, 2010
1 Year
9.89%
3 Year
-6.71%
5 Year
1.57%
10 Year
0.64%
Since Inception (08/01/1952)
9.70%
The performance data quoted represents past performance and is no guarantee of future results. Your returns and the principal value of your investments will fluctuate so that your shares [accumulation units], when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. For performance current to the most recent month-end, visit the TIAA-CREF website at www.tiaa-cref.org, or call 877 518-9161.

Of course, near-term performance is just a snapshot of what your money's been doing recently. To reach your retirement goals, you need a long-term strategy that will carry you through multiple market cycles and economic environments.

We believe the best way to minimize risk over the long term is to diversify your savings across several areas, including stocks, bonds, real estate, and money market funds. TIAA-CREF gives you access to these assets and more. Just this month we announced the acquisition of The Westchester Group, a leader in agricultural asset management, further diversifying the broad range of investments made within the TIAA General Account that support the TIAA Traditional Annuity.ii

The Importance of Advice That Puts You First

Putting together an effective long-term strategy for your retirement savings can seem daunting. According to a new survey from TIAA-CREF, more than three-quarters of Americans rely on themselves to make household financial decisions, while more than half of us admit that we don't know much about finance.

That's why it's important to seek objective advice. More than half of TIAA-CREF clients who speak with an advisor choose to save more, revisit their asset allocation, or both. They also increase their diversification from three asset classes to nine, on average.

TIAA-CREF retirement consultants are available in more than 60 regional offices to provide you with objective, non-commissioned advice. These consultants receive no sales commission as part of their total compensation and therefore only recommend products that can help you achieve your goals.iii

We recently expanded our advisory services to make consultations available in Spanish, so that more TIAA-CREF participants can feel comfortable and confident planning for the future.

Become Your Future You—With Us

To further help demystify the retirement planning process, we're offering a series of six videos that provide simple, straightforward steps to making your money work harder for you.

The first installment, How to Plan for Your Financial Future, reviews the basics of getting started. Future videos will offer practical tips on how to improve your savings, including how to get the most from your employer's retirement plan and how not to run out of money in retirement.

The first video is available here. Be sure to check back each week as new videos are released.

A Partner You Can Rely On

From market performance to advice that puts your interests first to new tools that cut through the financial fog, TIAA-CREF is your partner in planning for your future.

I encourage you to think about your financial goals and contact us for help in reaching them. For 92 years we've been helping to put retirement security within reach of people in the academic, research, medical, and cultural fields. We appreciate the opportunity to work with you and look forward to continuing to serve you.

Sincerely,

Roger W. Ferguson Signature

Roger W. Ferguson, Jr.
President and CEO

i) For each fund/account with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's/account's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Where applicable, Morningstar's performance rankings are based on linked performance that considers the differences in expense ratios, while actual performance data shown does not reflect such differences. The top 10 percent of funds/accounts in a category receive five stars, the next 22.5 percent receive four stars, and the next 35 percent receive three stars, the next 22.5 percent receive two stars and the bottom 10 percent receive one star. (Each share class is counted as a fraction of one fund/account within this scale and rated separately, which may cause slight variations in the distribution percentages. Based on Morningstar data for share classes [not funds] that have completed one calendar year of performance.)

ii) Agricultural investments occur within TIAA's General Account, an insurance company general operating account. The performance of the investments held in the TIAA General Account support the TIAA Traditional Annuity's guarantees of principal, minimum guaranteed returns, additional amounts and payout obligations. The General Account primarily invests in corporate and government bonds, structured finance instruments, and real estate.

iii) TIAA-CREF compensates advisors through a salary-plus-incentive program based on client service excellence and financial results. Advisors will only recommend products that help achieve our clients' goals.

TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit www.tiaa-cref.org for details.

Please note diversification is a technique to help reduce risk. There is no absolute guarantee that diversification will protect against a loss of income.

TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.

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© 2013 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017