Tiaa Traditional

[Magclaw]

I noticed Tiaa-cref has increased the yield on their Traditional annuity from 3 --> 3.15%.

This may be of interest for anyone who uses this as their bond allocation.

[Basenji]

I've wondered about that. I have a small amt in the traditional T-C and was trying to figure out in my overall AA how to categorize it, bonds? What is the underlying account/investment?

[Magclaw]

Yes money in the traditional can be considered bonds. Mine is in my works 403b, and I am free to transfer it between the traditional and stocks whenever I want. You get 3.15% return with no risk to principle, which seems much better than bonds to me (BND-total bond market = 2.47% return with risk of principle).

[FLBiker]

Hmm.  I might have to look into that, too.  I thought you were "locked in" to the traditional in some way.

[brotatochip]

Hmm.  I might have to look into that, too.  I thought you were "locked in" to the traditional in some way.

Some plans have restrictions within the tiaa traditional.  I know that my plan at work is a GSRA and funds can be moved freely in and out of this annunity without penalty.  Check what plan your employer offers then check the tiaa restrictions for that specific plan (SA, RA, and GSRA).

[Magclaw]

I spoke with a representative from Tiaa 1st to be sure. Then I tried transfering about 1,000 back and forth to make sure there were no issues.
I know the accounts that are restrictive on movement pay a higher rate, and older vintages were paying more too.

You can find more information here
http://www.profsadvisor.com/search?updated-max=2014-08-14T15:09:00-07:00&max-results=7

This is from the above website
"Restrictions
For those of you with TIAA Traditional within a Group Retirement Annuity (GRA), Retirement Annuity (RA), or a Retirement Choice (RC) contract, there are restrictions that prevent you from moving your accumulation out in a lump sum.  Due to these restrictions TIAA Traditional vintages within a GRA, RA, and RC contracts pay a higher interest rate than other accounts.
However, investors with a Supplemental Retirement Annuity (SRA), Group Supplemental Retirement Annuity (GSRA), or Individual Retirement Account (IRA or Roth), are able to transfer money into and out of TIAA Traditional in a lump sum.  If you transfer money out of TIAA Traditional in a lump sum and then move it back within 120 days, you receive the same vintages up to the amount you had originally invested.  If you transfer money out of TIAA Traditional and wait over 120 days to transfer an accumulation back, you will receive the new vintage rate. "

[spokey doke]

Thanks for the site reference - some interesting stuff.

So has anyone been practicing what he recommends regarding TIAA Trad and changing rates?

I'd also like to know what folks consider the clearest explanation of just what TIAA Trad is and how it works as a reference.

[spokey doke]

The current numbers I find (and noting I have an RA, GRA, and a GSRA with T-C):

RA and GRA: 3.9%
GSRA: 3.15

However, I don't see how to distinguish the rates for various 'vintages', or the rate I am earning vs. what a new vintage would earn (?!!!)