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-   -   Would you buy TIAA Guaranteed???? (http://www.early-retirement.org/forums/f28/would-you-buy-tiaa-guaranteed-40140.html)

nun 10-28-2008 09:32 AM

Would you buy TIAA Guaranteed????
 
I'm sure we've all re-evaluated out AA and investing methods over the last couple of months. I've always been a fairly conservative investor in the 60/40 to 50/50 range, but even so I'm down around $150k and thinking about other investments.

I have access to a TIAA Traditional retirement annuity that is currently paying 5%. If I was to divert my savings to it from my current allocation of 50% Bond Market, 25% US Equity, and 25% International Equity index funds, I'd have an annuity that would pay me $17k a year at retirement. My annual expenses will be in the $30k range and I'll also have $15k from rent. I'm also fully funding a 457 and with my IRA I should have $500k in other investments at retirement.

I'm inclined to keep my funds out of the annuity as I like having access to my capital, does anyone differ?

FinanceDude 10-28-2008 10:02 AM

Quote:

Originally Posted by nun (Post 738841)
I'm sure we've all re-evaluated out AA and investing methods over the last couple of months. I've always been a fairly conservative investor in the 60/40 to 50/50 range, but even so I'm down around $150k and thinking about other investments.

I have access to a TIAA Traditional retirement annuity that is currently paying 5%. If I was to divert my savings to it from my current allocation of 50% Bond Market, 25% US Equity, and 25% International Equity index funds, I'd have an annuity that would pay me $17k a year at retirement. My annual expenses will be in the $30k range and I'll also have $15k from rent. I'm also fully funding a 457 and with my IRA I should have $500k in other investments at retirement.

I'm inclined to keep my funds out of the annuity as I like having access to my capital, does anyone differ?

Personal choice, but TIAA is one of the insurers that is financially sound, so not the worst idea I've heard.

Coach 10-28-2008 10:22 AM

nun, I have a good chunk in TIAA Traditional and it has been a great consolation over the past year.

You do need to carefully research the payout options, which can vary depending on the account and perhaps even your institution's plan. In my case, the TIAA I hold in my Retirement Account can either be annuitized, paid out over 9 years ("Transfer Payout Annunity"), or can pay out interest only. The TIAA I hold in my Supplemental Retirement Account, which earns at a lower rate, can be sold or bought at any time.

Good luck!

Coach

nun 10-28-2008 10:59 AM

Quote:

Originally Posted by Coach (Post 738881)
nun, I have a good chunk in TIAA Traditional and it has been a great consolation over the past year.

You do need to carefully research the payout options, which can vary depending on the account and perhaps even your institution's plan. In my case, the TIAA I hold in my Retirement Account can either be annuitized, paid out over 9 years ("Transfer Payout Annunity"), or can pay out interest only. The TIAA I hold in my Supplemental Retirement Account, which earns at a lower rate, can be sold or bought at any time.

Good luck!

Coach

I have all the options available from annuity to transfer payout over 10 years. There's a small amount in there already from my first job 20 years ago that's been chugging along at 5%ish and it's also been a consolation to me recently as well. But the majority of my investments have been in equity and bond index funds and I considered the TIAA annuity again as way to guarantee a minimum level of income in retirement. Still it really all comes down to whether I think that I can do better than 5% return and how much I value flexibility over the guarantee of an annuity. The same as for everyone

LOL! 10-28-2008 02:30 PM

TIAA traditional is about 10% of my portfolio. I am currently in year 2 of the 10-year payout option. This fund has done its job for me. Over the long term, I think I would have been better off in other things, but when I look at what has happened in the last year, I am happy to be in TIAA traditional. So to have 5% to 15% of your assets in this fund seems OK. Hmmm, maybe I just justified my holding of this fund? :)

FinanceDude 10-28-2008 02:45 PM

Quote:

Originally Posted by LOL! (Post 739025)
TIAA traditional is about 10% of my portfolio. I am currently in year 2 of the 10-year payout option. This fund has done its job for me. Over the long term, I think I would have been better off in other things, but when I look at what has happened in the last year, I am happy to be in TIAA traditional. So to have 5% to 15% of your assets in this fund seems OK. Hmmm, maybe I just justified my holding of this fund? :)

My kids each have a beneficiary IRA at TIAA that my sister left them from her 403B.

40% of it is in the Traditional Account, and it's one of those boring 5% return things I like........;D

nun 10-28-2008 03:15 PM

Quote:

Originally Posted by LOL! (Post 739025)
TIAA traditional is about 10% of my portfolio. I am currently in year 2 of the 10-year payout option. This fund has done its job for me. Over the long term, I think I would have been better off in other things, but when I look at what has happened in the last year, I am happy to be in TIAA traditional. So to have 5% to 15% of your assets in this fund seems OK. Hmmm, maybe I just justified my holding of this fund? :)

The little bit I put in TIAA traditional 20 years ago was 5% of my portfolio before the 2008 Crash, now it's 7% of my reduced holdings. I like the consistent growth and guarantee of TIAA, but I've convinced myself that my bond and MM holdings (VBMFX, VIPSX, CREF Bond market and VMMXX) are almost as safe, will probably out perform TIAA and are far more liquid. How much am I fooling myself? Not much I imagine as my bond holdings must cover a lot of the same investments as TIAA.


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