Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Understanding my mom's Tiaa-Cref account?
Old 04-11-2005, 07:19 PM   #1
Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Houston
Posts: 1,445
Understanding my mom's Tiaa-Cref account?

I'm trying to help my mom with her asset allocation and I've realized that I don't know squat about how a Tiaa-Cref account works. She's an educator, so it's a 403b account, I think they call it a "retirement annuity" but I don't know how this compares to the various kinds of annuities that other companies sell (that I usually hear are a bad investment). Is this a tax deferred account where the withdrawals will be taxed in retirement? Does the fact that it's an annuity complicate things at all, or can I just consider it to be another IRA?

Are there some asset classes that she would be better off holding in in the account? It's got an interesting "Traditional/Guaranteed" option that seems to be like a GIC...I don't think she can get that in any other account, so seems like a keeper. But then it has other options like a bond fund, real estate fund, and inflation-linked bond fund. How do they compare to VBMFX, VGSIX, and VIPSX (the same asset classes from Vanguard)? Would she be better off holding 100% of the cref account in the "traditional" fund and then using her IRAs to hold the vanguard funds of the other classes to meet her allocation? The cref funds have decent expense ratios so no problem there. But maybe there's some tax reason why certain funds should be held in that account versus keeping them in the Roth or the IRA?

My thought is for her to hold a large-cap index in her taxable account (since she's run out of room in her retirement accounts) since it should be fairly tax efficient.

Thanks for any ideas...I poked around the Cref website but it didn't offer a lot of detailed information for someone who understands basic financial concepts (at least, not that I could find).

soupcxan is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Understanding my mom's Tiaa-Cref account?
Old 04-11-2005, 08:08 PM   #2
Recycles dryer sheets
Join Date: Jan 2005
Posts: 118
Re: Understanding my mom's Tiaa-Cref account?

Hi Soup-

Cref seems to get a lot of deference, but I am sure it is not because of the great job they do on their website explaining their various investments options. (I think it has more to do with their low costs). I am sceptical. If they can's explain it any better than that, well, maybe it really doesn't make sense to give them your money. Enron ring a bell?

I have had the same experiences trying to help my spouse figure out exactly what they really offer. I think their answer is that it's really not important for you to know.


rapoole is offline   Reply With Quote
Re: Understanding my mom's Tiaa-Cref account?
Old 04-11-2005, 08:44 PM   #3
Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,717
Re: Understanding my mom's Tiaa-Cref account?

I do not have tiaa-cref funds myself but a lot of folks around the lunch table do and my take on the overall discussion is that historically tiaa-creff had two funds, one equity and one bonds. You could move new cash contributions or equity into the bond side but you cannot liquidate the bond side quickly. They have had good returns compared to what was available 10+ years ago. They had low fees and they were mutually (member) owned so no brokers and owners to worry about. Before Vanguard they were about the best. But maybe not now. They have added more "products" and their fees have crept up. I met with a representative to consider moving my wife's 403b over to them and there was no hard sales push. In fact the fellow flat out said the only way he could justify recommending bond funds was as a long term investment and to reduce portfolio volitility a bit. Definitely not trying to cheat or mis represent anything.
I still think they are a good choice although I prefer Vanguard with its fund choices and which I understand better. But if it were the only or best choice from an employer I would work with them.
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Re: Understanding my mom's Tiaa-Cref account?
Old 04-12-2005, 12:18 AM   #4
Dryer sheet aficionado
Join Date: Mar 2005
Posts: 48
Re: Understanding my mom's Tiaa-Cref account?

403B is just the non-profit version of the 401-K.

It does NOT have to be used as an annuity. Some of the TIAA fixed income options, however, can't be gotten out of quickly. I made the mistake of putting some of my money there and had to move it out of there over 10 years (still about three years to go to get all available to move). When you retire, you have the option of using the funds to buy several kinds of annuities. While the fees aren't as ridiculous as some other plans, it wouldn't be my choice. You can leave in TIAA-CREF and withdraw according to guidelines, or roll into an IRA, either self-directed or with an advisor.

I'm not currently aware of the their allocation options, since I left University teaching in 2001 and rolled all of my funds into a self-directed IRA. However, they certainly have the usual options available, from indexes, bond funds, money market funds, etc.

This then becomes a question of what you think the best allocation is, what you think the market will bring in the next X number of years, how much diversification you want, etc.

Other areas on this site have lots of ideas on that.

Best wishes,

sparkee is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Automatic payments from a money market (savings) account a FIRE and Money 4 04-07-2007 12:14 PM
Vanguard Advantage Account and Quicken TromboneAl FIRE and Money 5 01-05-2007 10:51 AM
TIAA CREF = teachers annuity side mangodance FIRE and Money 3 07-02-2005 10:42 AM
Account types and Asset Allocation Helen Young Dreamers 5 03-07-2005 05:09 PM
Health Savings Account MooreBonds Other topics 3 12-30-2004 04:19 AM


All times are GMT -6. The time now is 02:02 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.