I've been considering moving my 403(b) from Vanguard to TIAA-CREF and would appreciate a second opinion, just to make sure I'm not doing anything too stupid.
My employer (Michigan State University) dropped Vanguard from its 403(b) vendor list about a year ago, so now my new contributions go to TIAA-CREF instead of Vanguard, where they'd been going for over 20 years. The new TIAA-CREF 403(b) appears to have some significant advantages over my old Vanguard 403(b), so I'm considering transferring at least the Employee Supplemental (GSRA) portion to the new TIAA-CREF 403(b):
1. This particular TIAA-CREF 403(b) has, among its offerings, Institutional and Signal class shares of a reasonable selection of Vanguard funds, while my old Vanguard 403(b) only offers higher expense ratio Individual class shares. (Never thought Vanguard would be the high-cost competitor!)
2. The new plan offerings include the TIAA Traditional annuity with a guaranteed 3% minimum return. Obviously it's not a bond fund, but seems like a reasonably safe bond alternative for a portion of fixed income, at least while yields remain low. (Unlike the restrictive transfer rules for TIAA GRAs, there are no complex restrictions on transfers between Traditional and other funds in a TIAA GSRA.)
3. I'd have the ability (but not the requirement) to eventually annuitize into TIAA's "participating annuity" for some income. This appears to be an odd beast, with only a portion of the distributions guaranteed, the rest varying from year to year at the discretion of the TIAA board. However if the current low interest rates persist, just the guaranteed portion alone (2.5% interest rate plus mortality credit) might come to look very attractive compared to an SPIA.
The Employee Supplemental (GSRA) account I intend to transfer represents about 20% of our investable assets, the rest of which are all at Vanguard. I'd place the money in TIAA Traditional, with the option of moving to Vanguard Total Bond Institutional and/or Vanguard Inflation Protected Institutional if rates move up and TIAA Traditional falls too far behind.
Seems like lower expenses for the Vanguard funds I would likely want, plus access to some unique offerings. The slight negative being that I'd be giving up the wider assortment of Vanguard funds I currently enjoy.
Am I missing anything?