Author Topic: Stick with TIAA-CREF or switch to Valic?  (Read 3120 times)

Making Cents

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Stick with TIAA-CREF or switch to Valic?
« on: August 06, 2015, 09:30:50 AM »
Hi All,

Thanks a bunch in advance to anyone knowledgable and generous enough to spend the time to lend advice.

I have been reading some scathing reviews of lifecycle funds lately and am wondering if I should switch. When I joined my employer 2 years ago, I had no experience with retirement investments and so after polling a few colleagues, my Dad, etc, I went with the most familiar option offered - TIAA-CREF lifecycle fund 2040. My employer contributes 10% of my annual salary. The expense ratios are 0.58% gross/0.46% net. Year to date performance is quoted as 5.37%. By contrast, my 401k (Vanguard Target Retirement 2040 Inv) has an expense ratio of 0.18% and a rate of return of 5.46%.

So my question is, should I switch the TIAA-CREF lifecycle fund over to something else, and if so, what?

Here are my other options within TIAA-CREF:

American Funds EuroPacific Growth Fund R4
CREF Equity Index R3
CREF Global Equities R3
CREF Growth R3
CREF Stock R3
Columbia Small Cap Value I Z
Eaton Vance Large Cap Value I
Prudential Jennison Mid-Cap Growth Fund Inc. Z
Sentinel Small Company Fund - Class I
TIAA-CREF Mid-Cap Value Fund - Institutional Class

CREF Bond Market R3
CREF Inflation-Linked Bond R3
PIMCO Total Return Admin Class
Templeton Global Bond Fund Advisor Class Shares

TIAA Stable Return Annuity
CREF Money Market R3
TIAA-CREF Lifecycle Funds with different target dates

TIAA Real Estate

Alternatively, I can go with VALIC:

Options available to me are listed in the link below. They include Vanguard Index funds.

My husband and I also have IRAs with Betterment - the default recommended mix of 90% stocks/10% bonds.

I went with lifecycle funds through work originally because I was uncomfortable choosing the mix and percentages for a balanced portfolio. I'm not likely to tinker with my portfolio in response to stock crash but generally uncomfortable with more than a moderate amount of risk, planning to achieve financial independence in about 15 years.

Thanks for reading this. Any thoughts (and reasoning behind it) very much appreciated.


  • Handlebar Stache
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Re: Stick with TIAA-CREF or switch to Valic?
« Reply #1 on: August 06, 2015, 06:20:07 PM »
Beware of Valic.  I was in it for several years, before MMM.  Fees were high, investments lousy.  Worst of all was trying to get my money out when I decided to switch to TIAA (only other option at the time).   

Making Cents

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Re: Stick with TIAA-CREF or switch to Valic?
« Reply #2 on: August 07, 2015, 10:46:53 AM »
Thanks. That's good to know, and that's consistent with the anecdotal advice I was getting from a bunch of folks when I selected TIAA-CREF.

Valic's expense ratios are quoted as being lower though, which is what is making me second guess that now.


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Stick with TIAA-CREF or switch to Valic?
« Reply #3 on: August 07, 2015, 10:50:00 AM »
With Valic, there may be a wrap fee. That's a fee on top of the expense ratio. Call and ask. There could be an annual fee. Also ask if there are any other fees, charges, surrender fees or mortality and expense charges associated with the Valic funds. If there are none, feel free to switch to Valic.
« Last Edit: August 07, 2015, 10:55:04 AM by pbkmaine »

Making Cents

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Re: Stick with TIAA-CREF or switch to Valic?
« Reply #4 on: August 07, 2015, 11:28:10 AM »
Thanks for those points. That's exactly the kind of thing I was worried I didn't know about!