Author Topic: TIAA 403(b) Investment Elections - Where to Invest?  (Read 1899 times)

PuckDaddy14

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TIAA 403(b) Investment Elections - Where to Invest?
« on: July 20, 2016, 07:45:26 AM »
Hello,

I just started at a new employer and was excited to enroll in the 401(k) plan.  Well, it is a 403(b) plan managed through TIAA CREF.  The problem is, they do not offer straight forward funds like Vanguard.  They are all TIAA funds and I do not know what to do because:

1)   Some are variable annuities and I am very unsure of about these types of investments.  I did some reading and it seems like they are complex with hidden fees.

2) The equity funds have high fees over 1%

I feel like I should still participate in the plan (there is no match until after 1 year of employment) but I wanted to check with Mustacians before making my elections.

I would normally use a breakdown that Futureadvisor.com gives me for a risk tolerant individual in their mid thirties but the options don't line up well.

Here are the investment options:

Equities
CREF Equity Index R1 Variable Annuities 0.59% Gross Expense Ratio
CREF Global Equity R1 Variable Annuities 0.71%
CREF Growth R1 Variable Annuities 0.65%
CREF Stock R1 Variable Annuities   0.72%
TIAA Access Equity Index Fund T4 0.80%
TIAA Access Growth & Income Fund T4 1.18%
TIAA Access International Equity Fund T4 1.24%
TIAA Access Large-Cap Growth Fund T4 1.19%
TIAA Access Large-Cap Value Fund T4 1.17%
TIAA Access Real Estate Securities Fund T4 1.29%
TIAA Access Small-Cap Blend Index Fund T4 0.81%
TIAA Access Small-Cap Equity Fund T4 1.17%
TIAA Access Social Choice Equity Fund T4 0.93%

Fixed Income
CREF Bond Market R1 Variable Annuities 0.68%
CREF Inflation-Linked Bond R1 Variable Annuities 0.61%
TIAA Access Bond Plus Fund T4 1.07%

Real Estate
TIAA Real Estate Variable Annuities 0.89%

Then there are a bunch of lifecycle funds. I guess I could do 2045 or 2050.  There are no estimated fees for those two funds. 

If anyone is willing to help me with an allocation here I would very much appreciate it.  Variable annuities seems interesting but complex.  If I were going to stay at this job for 10 or 20 years maybe that would make sense but I've been changing jobs every 3-5 years. 

Thank you in advance for your help.  Let me know if I can provide additional information.   
« Last Edit: July 20, 2016, 07:52:06 AM by PuckDaddy14 »

PuckDaddy14

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Re: TIAA 403(b) Investment Elections - Where to Invest?
« Reply #1 on: July 21, 2016, 11:34:07 AM »
Yikes! Any help at all?

DrF

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Re: TIAA 403(b) Investment Elections - Where to Invest?
« Reply #2 on: July 21, 2016, 12:03:30 PM »
Call or email your plan administrator and complain about the high fees. It is their "fiduciary duty" to give you access to funds with low fees.
http://www.latimes.com/business/la-fi-court-edison-401k-fees-20150519-story.html
http://www.forbes.com/sites/nextavenue/2015/05/20/what-the-supreme-courts-401k-ruling-means-to-you/#7d2b83f3c8f3

While you're on the phone with them, ask what the fees are for the lifecycle funds. They might be the lowest. It's helpful to provide ticker symbols for the funds so people here can look them up.
If the lifecycle funds are crap, then I recommend not contributing to your 403b until you are eligible for the company match. You should open an IRA and max it out for the year using low fee index funds. If you have more money to save, then I would put money into the 403b (since it will reduce your tax burden). Find the 403b index fund that has the lowest overall fees (any upfront fees?) and invest in that.

mskyle

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Re: TIAA 403(b) Investment Elections - Where to Invest?
« Reply #3 on: July 21, 2016, 12:15:31 PM »
What are the fees like on the lifecycle funds? Any reason you're not considering them? They're generally not a bad deal.

Trudie

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Re: TIAA 403(b) Investment Elections - Where to Invest?
« Reply #4 on: July 25, 2016, 09:12:29 AM »
I assume that if you have TIAA you're in education.  I have TIAA also.

First of all, make sure you're looking at the proper classes of funds.  Most people who have TIAA through their employer have access to different classes of shares with lower fees than what you are quoting.

Secondly, take advantage of free advice.  Sit down with an advisor when they come to your office.  Understand that unlike some other fund families, TIAA people are not earning commission for buying and selling certain funds or churning.  Vanguard is a fantastic company, but TIAA is in the top 5, I would say.  They have some services you may find valuable later in life, when you are on the cusp of retirement.

Thirdly, you can open something called a "brokerage window" within your TIAA retirement account which gives you access to many other funds and fund families.  This may be an option for you if you want to diversify outside of TIAA.


PuckDaddy14

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Re: TIAA 403(b) Investment Elections - Where to Invest?
« Reply #5 on: July 25, 2016, 10:25:20 AM »
Thank you.  I am in non profit.  I will take advantage of the free consultation.