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).
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).