Author Topic: 403(b): TIAA-Cref or Fidelity?  (Read 4847 times)

Phillydomer

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403(b): TIAA-Cref or Fidelity?
« on: August 28, 2014, 07:30:48 AM »
Hi All, I'm posting here for the first time after discovering MMM and the forum in the last few months. I've begun a new job at a university that provides 403(b) plans through either TIAA-Cref or Fidelity, and I'm wondering if anyone out there has suggestions for choosing between the two. My primary concern is to choose whichever plan will provide the lowest expense ratios, which I have investigated, but I would also be grateful for personal accounts of your experiences with either of these firms. Thanks in advance!

sandandsun

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #1 on: August 28, 2014, 08:15:04 AM »
Choose your funds and do a direct comparison of expenses... TIAA-CREF is general pretty low relative to the industry, but you'll want to be sure based on the exact funds you want...
I've been with TIAA for 15 years for my 403 and 457 and have no complaints...

PeteD01

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #2 on: August 28, 2014, 08:15:55 AM »
Jump on the chance enrolling in TIAA CREF.
The TIAA Traditional Annuity in a qualified account is something you might be grateful for having access to later on.
You may also have access to Vanguard funds through your TIAA CREF account.

Another Reader

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #3 on: August 28, 2014, 08:47:22 AM »
Don't know why anyone is recommending an annuity, especially within a qualified plan.

I suspect the better bet will be Fidelity.  Compare the list of funds each plan offers and the overall cost of participating.  If you have the Spartan line of Fidelity funds, those are index funds comparable to Vanguard's index funds.  If TIAA-CREF offers Vanguard funds, check the fund and overall expenses.  Make sure you are not being forced into an annuity wrapper to buy Vanguard funds at TIAA-CREF. 

I have a lot of experience with the retail side of Fidelity. Service is fine, the website is superior to most of the competition.  My only experience with TIAA-CREF was with an on-line savings account.  Based on their embarrassingly incompetent handling of the roll out and what has happened since the roll-out with the on-line bank, I would not be inclined to do business with them in the future.

Mrs. PoP

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #4 on: August 28, 2014, 08:58:05 AM »
It's probably going to depend mostly on what's available within each platform and what the expenses are. 

In our experiences, our Fidelity 401Ks are pretty decent, and our employers have done a good job of getting low cost options (relative to company size) in there for us.  A TIAA-CREF representative for the 457 my MIL had the option to join, on the other hand, tried to use scare tactics to get her into an annuity which didn't make sense for her financial plans and it had a 5.75% FRONT LOAD fee (and high expense ratio after that) to boot.  Not cool.  YMMV, but I don't think I'll ever give TIAA-CREF a shot at any of our business. 

wrightstuff

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #5 on: August 28, 2014, 09:10:25 AM »
To echo Another Reader, I chose the Fidelity Spartan funds when I joined the academic world a year ago.  TIAA/CREF didn't impress me and Fidelity's support has been really good to date.

Best of Luck!

beltim

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #6 on: August 28, 2014, 09:17:17 AM »
Don't know why anyone is recommending an annuity, especially within a qualified plan.

The TIAA traditional annuity is like the G fund in the TSP: like a bond fund, but guaranteed not to lose money.  It's a great product, although not necessarily enough to get TIAA if they don't offer any good stock funds in a particular plan.

sandandsun

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #7 on: August 28, 2014, 09:51:26 AM »
off topic a little, but I will also add, since you will be working at a university, check on the availability of a 457 account.  If available, you can max your 403b and 457 with 17,500 EACH every year (and that's in addition to the percentage you are contributing to get the employer match, if there is one).  The paperwork will sometimes appear to ask you to choose which type of account you want extra contributions to go into, but you can select both and max both, if that's an available option for you...
My wife and I both work for a university and both are able to max 403 and 457...

wrightstuff

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #8 on: August 28, 2014, 09:55:02 AM »
off topic a little, but I will also add, since you will be working at a university, check on the availability of a 457 account.  If available, you can max your 403b and 457 with 17,500 EACH every year (and that's in addition to the percentage you are contributing to get the employer match, if there is one).  The paperwork will sometimes appear to ask you to choose which type of account you want extra contributions to go into, but you can select both and max both, if that's an available option for you...
My wife and I both work for a university and both are able to max 403 and 457...

My SO and I were shocked about the 403b and 457 allowances!  And pleased!  I also urge you to check out the 457 availability.

sandandsun

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #9 on: August 28, 2014, 09:58:28 AM »
We were too! I thought, this can't be right? but it is :)

Another Reader

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #10 on: August 28, 2014, 10:02:21 AM »
Often insurance company providers of these plans will offer stable value funds.  These are collections of short term annuity contracts, but you are not the annuitant.  Stable value funds often pay decent rates.  Prudential was paying around 3 percent at the end of last year on the stable value fund in my old 457 plan.  That's a worthwhile parking place for cash.  The G fund holds short term treasuries, which have less risk.  Looks like the return was 2.31 percent for the 12 months ending in July.  Pretty darn good for a risk free return right now.

Not familiar with the TIAA-CREF product.  Can someone post more details?

beltim

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #11 on: August 28, 2014, 10:24:50 AM »
Often insurance company providers of these plans will offer stable value funds.  These are collections of short term annuity contracts, but you are not the annuitant.  Stable value funds often pay decent rates.  Prudential was paying around 3 percent at the end of last year on the stable value fund in my old 457 plan.  That's a worthwhile parking place for cash.  The G fund holds short term treasuries, which have less risk.  Looks like the return was 2.31 percent for the 12 months ending in July.  Pretty darn good for a risk free return right now.

Not familiar with the TIAA-CREF product.  Can someone post more details?

Basically the same as the stable value fund you were talking about: https://www.tiaa-cref.org/public/products-services/retirement/supplemental/traditional

clarkm04

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Re: 403(b): TIAA-Cref or Fidelity?
« Reply #12 on: August 28, 2014, 10:45:27 AM »
There's not enough information to adequately answer your question.

What funds does each have?

TIAA-CREF has tons of funds and some employers' plans have access to more funds over others.  My workplace uses TIAA-CREF and in 2006, they expanded our options.

You should be able to find out info about both and post that.

For Fidelity, look for Spartan funds.  For TIAA-CREF, avoid all their access funds and most of the TIAA funds.

I personally use the TIAA-Traditional, CREF Equity Index, and CREF Bond Index.

I wish our company had Vanguard or Fidelity (with Spartan funds), or T. Rowe Price, but TIAA-CREF is a solid company and their are so many worse mutual funds out there.

This forum is consistently down on annuities, but TIAA-CREF's are the best (cheapest) and there are advantages to having an annuities.  In William Bernstein's new book, Rational Expectations, he advises people to place their bare retirement needs into a TIPS ladder or a annuity based on how many investors failed to maintain asset allocation during the Great Recession and how many people he knew lost significant portions of their retirement right before retirement and made overall bad decisions.

Lots of investors on this forum talk a big game (it's easy to talk big when we've had an unrelenting bull market for 5ish years) of having 80% or 90% in equities even in their 50s or 60s, but when a massive correction comes, will they be able to rebalance and stick to it?  Some (smart, cut off the emotional human side, or ballsy) will, but evidence shows many investors bail particularly when losses mount and the GFC with 40-60% drops caused that to occur with lots of people.

Good luck on your choice!