Author Topic: TIAA vs Valic vs Voya  (Read 11878 times)

dwell

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TIAA vs Valic vs Voya
« on: June 16, 2016, 08:24:52 PM »
Hello all,

I am newbie here!  Currently I am enrolled in a defined contribution plan with the vendor TIAA.  I have been getting serious about contributing more to my retirement accounts, and have been looking to lower the expense ratios on the funds that I currently have.  Right now, I have a 2055 Target Fund at TIAA with an expense ratio of .65%/.44% (Gross/Net).  With the other two vendors, I would have access to the Vanguard 2055 Fund at a much lower expense ratio of .16%.  I really believe that switching to one of the other companies will benefit me financially in the long run, but I am really unsure of which one to go with.

Does anyone have any recommendations?

EDIT: And now I realize I should have posted this in the Advice section.
« Last Edit: June 16, 2016, 08:47:23 PM by dwell »

pbkmaine

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Re: TIAA vs Valic vs Voya
« Reply #1 on: June 16, 2016, 09:01:00 PM »
Ask if there are any additional fees associated with Voya and Valic. There could be: annual fees, wrap fees, mortality and expense charges. You want to have all fees and expenses associated with the other vendors to be identified and listed. The mutual fund expense ratio may be all there is. But you want to make sure.

MustacheAndaHalf

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Re: TIAA vs Valic vs Voya
« Reply #2 on: June 16, 2016, 09:30:41 PM »
I'd be surprised if Voya offers low fee funds - they tend to use 1% expense ratio funds, and those TV ads you see for them are paid through 0.25% of marketing fees they charge investors in their funds.  It's possible, but be wary.

Does your plan provide a company match?  A bonus of +25% or +50% of contributions, up to a limit?  Make sure you get all of the company matching, then consider alternatives.

For example, Vanguard Total Stock Market has a 0.05% expense ratio.  The 2% dividend at the median tax bracket (25% ordinary  / 15% qualified dividends) costs 0.30% a year in taxes on that dividend.  All told, in a taxable account at Vanguard you would pay 0.35%.  And when you sell, you get the lower tax bracket for long-term gains.

dwell

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Re: TIAA vs Valic vs Voya
« Reply #3 on: June 16, 2016, 10:01:54 PM »
Ask if there are any additional fees associated with Voya and Valic. There could be: annual fees, wrap fees, mortality and expense charges. You want to have all fees and expenses associated with the other vendors to be identified and listed. The mutual fund expense ratio may be all there is. But you want to make sure.

I will write up an email to both reps for Voya and VALIC and see what they say. Thanks for the advice!

dwell

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Re: TIAA vs Valic vs Voya
« Reply #4 on: June 16, 2016, 10:04:03 PM »
I'd be surprised if Voya offers low fee funds - they tend to use 1% expense ratio funds, and those TV ads you see for them are paid through 0.25% of marketing fees they charge investors in their funds.  It's possible, but be wary.

Does your plan provide a company match?  A bonus of +25% or +50% of contributions, up to a limit?  Make sure you get all of the company matching, then consider alternatives.

For example, Vanguard Total Stock Market has a 0.05% expense ratio.  The 2% dividend at the median tax bracket (25% ordinary  / 15% qualified dividends) costs 0.30% a year in taxes on that dividend.  All told, in a taxable account at Vanguard you would pay 0.35%.  And when you sell, you get the lower tax bracket for long-term gains.

For some reason, the of the three providers that we have access to use (401a), two of them (Voya and VALIC) has access to Vanguard Target Date Retirement funds.  The contributions to the 401a are 8% of my check, and a 5.7% employer match.  Really, I am just trying to make sure I am getting the best bang for my buck.

Rural

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Re: TIAA vs Valic vs Voya
« Reply #5 on: June 17, 2016, 06:27:49 AM »
Check Valic very, very carefully before you go to them. They were my husband's only choice, and there are hidden fees in his former employer's contract, at least. Plus now I'm trying to find a way around a 5% surrender charge to roll it over, and not having any luck so far.


 Are there other TIAA options available to you that look interesting? My 403(b) and 457 are with them (other option was Valic), and I did use the target funds early on as I was learning, but I've favored lower fee index funds with more recent investments.


Not saying you shouldn't make the change - the scenarios seem to vary wildly by employer. But read everything, all the fine print (from all of them).

dwell

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Re: TIAA vs Valic vs Voya
« Reply #6 on: June 17, 2016, 10:56:33 AM »
Check Valic very, very carefully before you go to them. They were my husband's only choice, and there are hidden fees in his former employer's contract, at least. Plus now I'm trying to find a way around a 5% surrender charge to roll it over, and not having any luck so far.


 Are there other TIAA options available to you that look interesting? My 403(b) and 457 are with them (other option was Valic), and I did use the target funds early on as I was learning, but I've favored lower fee index funds with more recent investments.


Not saying you shouldn't make the change - the scenarios seem to vary wildly by employer. But read everything, all the fine print (from all of them).

I just heard back from VALIC and in addition to the expense ratio of the fund, they charge a 0.42% admin fee.  I am still waiting to hear on Voya.