Should I move my $ from TIAA-CREF to Vanguard?

[OzzieandHarriet]

I have a 401k with TIAA-CREF from my last job, which I left last year, so I will not be adding to it anymore. It's been a pretty conservative investment, with the overall rate of return only about 5%. It's set up right now in a targeted plan (can't remember all the details right now). The value at the moment is a little less than a quarter of our total retirement/after tax dollars -- and my husband is still working, so he's contributing the max to his 401k and we're both putting the max into our Roth IRAs, plus we're putting money regularly into a couple of after tax accounts. The expense ratios for the TIAA-CREF investments seem very high compared with Vanguard, so I've been wondering if I should move it all over. All of our other investments are with Vanguard. Is there a simple way to figure this out and/or educate myself?

[Gone Fishing]

Yes. Call Vanguard, they will walk you through the process step by step, no self education needed. 

[pbkmaine]

Do you want to buy a fixed annuity someday? The TIAA variable annuity funds like CREF Stock and TIAA Traditional give you the ability to easily annuitize. TIAA as an insurance company gets the highest possible ratings. You get additional annuity credits with TIAA Traditional as well. If you plan to go this route, have TIAA run some calcs for you before making the switch

[OzzieandHarriet]

The whole annuity thing confuses me. Would there be any benefit to having one? Aren't they more expensive in terms of fees than regular funds?

[jodelino]

I have most of my taxable and non-taxable assets in stocks and real estate and REITs elsewhere, but I have about $120K in TIAA-CREF from jobs I left years ago. I wasn't paying much attention to it (bad behavior, I know), but I recently moved most of the equities & bond funds in that account to the TIAA Traditional, which, for the vintage I have, is paying a minimum of 3.49% per year. This is a very conservative investment, but I felt comfortable that it diversified me into something very safe. I'd rather have this than a CD.

I have a friend who started contributing to TIAA Traditional in the 1980s. His vintage is paying 7%. I wish I had that!

I don't know if what I did was the wisest move (comments welcome), but you might want to look into your options for safe diversification with TIAA.

[OzzieandHarriet]

What I have it in now is 45% equities, 31% fixed income (bonds), and 24% multi-asset (CREF Social Choice -- which says it's a variable annuity).

What I'm concerned about is not so much the investments here as the fees, which are much higher than Vanguard's.

It seems like, from what I've read, that it doesn't pay to buy an annuity, especially given our total assets.

Don't know if it matters, but I'm 57 and DH is 55.

[superannuationfreak]

It would be worth digging into the documentation/website for your particular plan to find out what rate the TIAA Traditional pays.  As noted above, there can be wide variation for different plans and time periods.

The reason is, many TIAA Traditional plans have a minimum interest larger than other 'safe' rates available in bonds.  If you did want a 'safe' bond-like allocation it may be a useful product for you.  In this case I'd worry less about the label (annuity) and find out more about the actual product benefits and limitations.  There is a critical mass of TIAA members over on bogleheads.org so it may be worth stopping by over there to see how others use the Traditional product as part of a broader asset allocation.

Ideally we should put this decision in the context of an overall asset allocation.  I.e. consider across all your financial accounts and real-estate investments dedicated to financial independence what proportion you want in shares, real estate, bonds, cash, etc.  Then see what the best products available to you are to meet that allocation.  If you want some lower-risk assets in your portfolio it is possible that a TIAA Traditional could fit the bill.  If not using harder-to-access assets like TIAA Traditional or TIAA Real Estate then the fees probably aren't as competitive, as you say.

One other thing to consider is whether you want to do Roth IRA conversions in the future.  Having a traditional IRA can make this a messier proposition.  Will you have a new 401k you can roll funds into?

[pbkmaine]

 Re: turning TIAA-CREF funds into fixed annuities. Call them and ask to speak to one of their Wealth Managers. It's really complicated. Let them explain it and run some numbers for you.

[NinetyFour]

I would move it over to Vanguard.  I am stuck with TIAA-CREF until I retire, and the second I do, I am pulling out everything and moving it over to Vanguard.

[fartface]

I have most of my taxable and non-taxable assets in stocks and real estate and REITs elsewhere, but I have about $120K in TIAA-CREF from jobs I left years ago. I wasn't paying much attention to it (bad behavior, I know), but I recently moved most of the equities & bond funds in that account to the TIAA Traditional, which, for the vintage I have, is paying a minimum of 3.49% per year. This is a very conservative investment, but I felt comfortable that it diversified me into something very safe. I'd rather have this than a CD.

I have a friend who started contributing to TIAA Traditional in the 1980s. His vintage is paying 7%. I wish I had that!

I don't know if what I did was the wisest move (comments welcome), but you might want to look into your options for safe diversification with TIAA.

My husband- age 45- is stuck with tiaa for another 15 years. He has $82k in this account and 25% of the balance in the "Traditional". The rest is in the lowest equity (S&P 500) index funds  I could find. Hate TIAA CREF.

[FLBiker]

Thanks for this.  We've got most of our stuff with Vanguard, but my current 403b is with TIAA-CREF.  I was thinking I'd immediately switch it to Vanguard once I retire, but I'll look into a traditional annuity a bit.  I'm skeptical, but we'll see what they're offering when the time comes.

[OzzieandHarriet]

Thanks for the comments. I have waited to do the transfer because I wanted to make sure I wouldn't need to access the money. If you leave a retirement account in place and you're over 55 when leaving a job and not employed full time (I believe), you can withdraw money without penalty. But as it turned out, we've been more than fine without my full-time income. And now that DH is over 55, if he for some reason loses his job (not likely, but you never know), he could access his retirement savings. So I think I'm going to do it.

According to the current info I have, btw, TIAA Traditional is paying 3.15%.

[StangStache]

This thread had some great information.

Not to thread jack, but I'm in a similar situation, but have multiple accounts with TIAA-CREF instead of 1.  Specifically, I have 4 total.  2 (employer contribution and my contribution) from my previous employer that have a balance of $25k, and 2 analogous ones with my new employer.  I was told that I should just leave the old ones as-is, since they're easy to keep track of (since I'll be managing my new accounts through TIAA-CREF anyway), but now I wonder if I should roll them over.

Is it possible to roll over just the old 2 accounts?   I currently have a Roth IRA through Vanguard.  The low fees are intoxicating.

[Schaefer Light]

TIAA-CREF confuses the hell out of me.  My wife has her retirement account with them, and every time I try to make sense of one of her quarterly statements I get a massive headache.

[Indexer]

Be careful with the TIAA Traditional.  It normally pays a decent rate, but in some plans it is very restricted when you go to w/d it.  In some cases I've heard of it taking people 10 YEARS to fully withdraw the account.

[DrF]

This thread had some great information.

Not to thread jack, but I'm in a similar situation, but have multiple accounts with TIAA-CREF instead of 1.  Specifically, I have 4 total.  2 (employer contribution and my contribution) from my previous employer that have a balance of $25k, and 2 analogous ones with my new employer.  I was told that I should just leave the old ones as-is, since they're easy to keep track of (since I'll be managing my new accounts through TIAA-CREF anyway), but now I wonder if I should roll them over.

Is it possible to roll over just the old 2 accounts?   I currently have a Roth IRA through Vanguard.  The low fees are intoxicating.

Roll out of TIAA, their fees are much higher than what you can get elsewhere. You will get better options too.

[terran]

Are your options in TIAA-CREF dependent on your employer? My wife's 403b has Vanguard target date funds as well as total stock, total international stock, and total bond funds of the institutional class that have lower ER's than admiral class shares.

[Kwill]

With TIAA-CREF on my plan there's a lot of different options. Once I started reading this blog, I switched from the traditional annuity to the TIAA-CREF Equity Index Fund (Institutional) TIEIX. The expense ratio  is 0.07% for that fund, which is lower than for Admiral shares on Vanguard. It tracks the Russell 3000 index. I think that was the lowest expense ratio I saw among their options.