Author Topic: TIAA-CREF Plan  (Read 5637 times)

stevesteve

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TIAA-CREF Plan
« on: October 01, 2013, 02:26:08 PM »
I'm starting putting more optional money towards retirement but my employer unfortunately has limited plans.  My dream would be a Vanguard target fund or a mix of admiral funds but that's not an option.  Basically, my options are TIAA-CREF mutual funds or a bunch of variable annuities.  I'm pretty sure TIAA-CREF is the way to go there.  The down side is my only options are retirement class funds which have high expense ratios compared to what I've come to expect with my Vanguard accounts.

FundExpense Ratio
Bond Index     0.38%
Equity Index     0.32%
S&P 500 Index     0.32%
International Equity Index     0.33%
Lifecycle 20XX     0.72-0.74%

While I put my Vanguard retirement account into their target funds my others I balance myself.   I'm inclined to think the difference between 0.05% and 0.18% is more reasonable than paying 0.72%.  So, my question is which would you invest in and what can you tell me about their index funds?

matchewed

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Re: TIAA-CREF Plan
« Reply #1 on: October 01, 2013, 04:30:27 PM »
Who is they and what funds do you have as an option when you say which? Also, not to be a jerk but can't you read the information about the funds to get  the answers you're looking for?

Maybe just clarify your question as I'm unsure what you're asking.

stevesteve

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Re: TIAA-CREF Plan
« Reply #2 on: October 01, 2013, 07:35:21 PM »
Who is they and what funds do you have as an option when you say which?


They is TIAA-CREF and the funds I have access to are the ones I linked.  The gist of my question is are these TIAA-CREF index funds good, broad index funds.  It's not clear to me that they are similar to the Vanguard Total Stock Market Index Fund.  The TIAA-CREF equity index attempts to track the "Russell 3000" but I am not sure if that's a good target.  I've also heard some criticism here on the forum of what investments index funds choose so I wanted to know any opinions on these TIAA-CREF products beyond merely the expense ratio.  This is probably more of a worry for the bond funds which I'd want to use in an 80-20 balance.

Also, not to be a jerk but can't you read the information about the funds to get  the answers you're looking for?

I can about expense ratio and general class.  I cannot read a prospectus and know that its mix of equities / bonds is good or that the fund 'managers' manage to track an index well.  In the end I was hoping to dredge out stories of "these are the pitfalls with my TIAA-CREF account" or "this is why I like them and they're just a slightly more expensive Vanguard".

Thanks for the reply!

brewer12345

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Re: TIAA-CREF Plan
« Reply #3 on: October 01, 2013, 08:18:02 PM »
Do you have the option of putting in money in TIAA's "traditional" annuity?  I would have killed for that opportunity.

stevesteve

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Re: TIAA-CREF Plan
« Reply #4 on: October 01, 2013, 08:26:14 PM »
Do you have the option of putting in money in TIAA's "traditional" annuity?  I would have killed for that opportunity.

Can you tell me more?  It seems I can put it in the "Group Supplemental Retirement Annuity" which is listed under  Traditional Annuity.  Can you tell me why this is a good investment?  It seems like guaranteed 3% returns with possibility for more.

Mazzinator

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Re: TIAA-CREF Plan
« Reply #5 on: October 01, 2013, 08:38:31 PM »
I'm no expert..at all.. But the hubs and myself both have our Roths through them. We opened them in 2003 and have the same funds you listed except for the lifecycle one. Even though Vanguard has lower er we are going to keep ours with tiaa for ease (at least for now)
I never read anything that tiaa was horrible etc etc

brewer12345

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Re: TIAA-CREF Plan
« Reply #6 on: October 01, 2013, 10:32:09 PM »
Do you have the option of putting in money in TIAA's "traditional" annuity?  I would have killed for that opportunity.

Can you tell me more?  It seems I can put it in the "Group Supplemental Retirement Annuity" which is listed under  Traditional Annuity.  Can you tell me why this is a good investment?  It seems like guaranteed 3% returns with possibility for more.

The real attraction is what happens when you flip the switch and start getting a payout in retirement.  This is a participating payout annuity from one of the strongest mutual insurers in the world (I specifically chose to buy a life insurance policy from them due to their financial strength).  Do a bit of research on the attractiveness of annuitizing a portion of your portfolio in retirement.  It helps portfolio survivability a LOT.  I would not want to put everything in this option, but 25 to 40% of your portfolio would be pretty good ballast.  I have an option to annuitize part or all of my 401k and I very much value this option.

naners

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Re: TIAA-CREF Plan
« Reply #7 on: October 02, 2013, 06:06:16 AM »
With TIAA CREF you can usually "annuitize" your accounts when you're close to retirements. That way you (theoretically) get the benefit of higher returns when you have a longer time horizon, then less risk when you retire. So no need to sign up for the trad annuity just yet unless you're very close to retirement.

My 403b is also with TIAA CREF and IMO those are good index funds. I have 25% in their bond index, 53% in their Russell 3000 equity index, 22% international equity index. You asset allocation will differ depending on age/risk tolerance etc; check out the Bogleheads wiki and the rest of the internets for advice on allication. I picked the Russell 3000 over the S&P 500 because of the broader diversification. These funds are not a mix of bonds/equities; they are just one asset class. An index fund is an index fund; they all track the index pretty well, as you'll see from the graphs on the TIAA website.

Personally I don't think the life cycle funds are worth the extra expenses unless you're totally unwilling to rebalance your allocation annually.

stevesteve

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Re: TIAA-CREF Plan
« Reply #8 on: October 02, 2013, 06:57:53 AM »
Thank you so much for all of your answers.  It's good to know about the annuitize option and I will look into how it works.