TIAA-CREF Equity Accounts--Do I Need All Three Of These?

[NinetyFour]

My retirement funds are at TIAA-CREF.  (I had no choice about that.)

It seems that there is only one index fund available to me.  But for some reason, I chose to also put some $$ in two of their other equities funds.

Here are the descriptions of the three funds:

CREF Equity Index Fund
QCEQRX, Expense Charge .39%

This variable annuity account seeks a favorable long-term rate of return from a diversified portfolio selected to track the overall market for common stocks publicly traded in the United States, as represented by a broad stock market index. The account buys most, but not necessarily all, of the securities in its benchmark index, and will attempt to create a portfolio that closely matches the overall investment characteristics of this index.


CREF Growth
QCGRRX, Expense Charge .42%

This variable annuity account seeks a favorable long-term rate of return, mainly through capital appreciation, primarily from a diversified portfolio of common stocks that present the opportunity for exceptional growth. Under normal circumstances, the account invests at least 80% of its assets in common stocks and other equity securities. The account invests primarily in large, well-known, established companies, particularly those with new or innovative products, services or processes that may enhance future earnings prospects. To a lesser extent, the account may also invest in smaller companies with higher growth potential as well as companies in new and emerging areas of the economy. It may invest in companies in order to benefit from prospective acquisitions, reorganizations or corporate restructurings. The account may also invest up to 20% of its assets in foreign securities.


CREF Global Equities Account
QCGLRX, Expense Charge .47%

This variable annuity account seeks a favorable long-term rate of return through capital appreciation and income from a broadly diversified portfolio that consists primarily of foreign and domestic common stocks. Under normal circumstances, the account invests at least 80% of its assets in equity securities of foreign and domestic companies. The account uses a variety of different investment strategies to seek out attractively priced companies, of any capitalization size, that management believes are undervalued based on the company's prospects for growth in earnings, cash flow, revenues and other relevant measures. Particular focus is placed on companies with shareholder-oriented management teams dedicated to creating value.

My question:  Should I take all my funds from CREF Growth and CREF Global Equities and put them in CREF Equity Index Fund?

Note:  From what I can tell, the Index Fund follows the Russell 3000 Index.

Thanks very much.

[DavidAnnArbor]

Yes I would definitely go into the fund with the lowest expense charge.  .39% is still expensive for an index fund though. What a shame.

[NinetyFour]

Yes, their fees are crazy high compared to Vanguard's.  As soon as I retire, I will yank all the funds out of TIAA-CREF and move them to Vanguard.

Thanks for your response.

[NinetyFour]

I also have some other investments in Vanguard at the moment, but my retirement funds and my 403b have to be in TIAA-CREF--until I leave my employer.

[DavidAnnArbor]

Is there a brokerage option in which you can buy stocks, or rather Vanguard Exchange Traded Funds?  It might be cheaper if the fees associated with the brokerage account combined with the lower expense ratio of the Vanguard fund would be cheaper than the expense ratio of the index fund to which you write about.

[NinetyFour]

Is there a brokerage option in which you can buy stocks, or rather Vanguard Exchange Traded Funds?  It might be cheaper if the fees associated with the brokerage account combined with the lower expense ratio of the Vanguard fund would be cheaper than the expense ratio of the index fund to which you write about.

No, I do not have that option.  Thanks for the idea, though.

[DavidAnnArbor]

You may also be able to take a Roth IRA completely separate from your employer TIAA-CREF retirement plans.  If so, then you can choose to have your Roth with Vanguard or Fidelity.

Here's a quote from an online article:
"You can always contribute to a traditional IRA up to the annual contribution limits as long as you have sufficient compensation or salary. There are income limits dictating whether you can contribute to a Roth IRA. The limits depend on your filing status and your modified adjusted gross income, or MAGI. If you can't contribute directly to a Roth IRA, then you can contribute to a traditional IRA and then perform a Roth IRA conversion.
Since your employer has a retirement plan in place, there may also be limits on making tax-deductible contributions to a traditional IRA. This depends on your filing status and MAGI.

 http://www.bankrate.com/finance/retirement/roth-401k-will-help-you-save-on-taxes.aspx

[NinetyFour]

I believe I am not eligible to start a TIRA.  But I did fully fund a Roth in 2013 and 2014.  It is in Vanguard (VTSAX).  That is also where my Beneficiary IRA is.

A friend (who is FI, and quite wealthy) recommends that I keep all three equity funds in TIAA-CREF (described above).  So now I am back to my original question:

Would I be missing out on something if I consolidate the CREF Growth and CREF Global Equities into the CREF Equity Index Fund? 

Since the Equity Index Fund follows the Russell 3000, it seems like I am pretty much covered.  And since so many of the large US companies have global exposure, it seems like I don't need a separate equity fund for global stocks.

I am just looking for a bit more encouragement before I make this leap.

Thanks.

[clarkm04]

I'm in the same boat as you.

All my equities are in the Equity Index fund.

Lowest expense ratios and best performance over last ten years.

[NinetyFour]

Thanks, clarkm04.  I am getting closer to leaping.

[pbkmaine]

You will be missing the foreign exposure of CREF Global Equities. Its holdings are about 40% US, 60% foreign.  If you want an all-cap equity fund, both US and foreign, there is also CREF Stock. It is about 70% US, 30% foreign.

[NinetyFour]

Right, but the expense fee for Global Equities is .47% and the expense fee for CREF Stock is .46%.  Not sure that additional exposure is worth the higher fees.  But thanks for your input.

[DavidAnnArbor]

Here's what Warren Buffett will have his heirs inherit:
"My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers."

Consequently, go with the lowest cost Equity Index fund, which will give you some exposure to non-US economic trends because many of the companies are multi-national.

[NinetyFour]

Thanks--that's what I am thinking.  And it's fortunate, I guess, that of all the TIAA-CREF funds available to me, their Equity Index Fund has the lowest fees.  (Still not anywhere as low as Vanguard's, but still.)

Thanks for the replies, everyone.