403(b): Vanguard -> TIAA-CREF?

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403(b): Vanguard -> TIAA-CREF?

Postby colejr » Sun Dec 30, 2012 4:08 pm

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?

JimC
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby ofckrupke » Sun Dec 30, 2012 6:44 pm

colejr wrote:Am I missing anything?


I don't think so.
BTW if you are already a TIAA GSRA certificate-holder I think point 3 only distracts from the present decision about whether to transfer-in a substantial lump sum to Trad.
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby colejr » Sun Dec 30, 2012 8:19 pm

ofckrupke wrote:
colejr wrote:Am I missing anything?


I don't think so.
BTW if you are already a TIAA GSRA certificate-holder I think point 3 only distracts from the present decision about whether to transfer-in a substantial lump sum to Trad.


Thanks, and yes I've been contributing to a new GSRA, as well as a new SRA. So as you suggest, one decision a time.
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby Levett » Sun Dec 30, 2012 8:29 pm

"Am I missing anything?"

Yep.

If you go over to the Morningstar TIAA site and place your exact query there, you are likely to receive responses from MSU folks--active and retired.

Lev
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby colejr » Sun Dec 30, 2012 10:25 pm

Levett wrote:If you go over to the Morningstar TIAA site and place your exact query there, you are likely to receive responses from MSU folks--active and retired.


Thanks, good idea. I may do that, as I will likely find some with experience in the details of the transfer process. I'm also appreciative of the Bogleheads perspective found here.
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby Easy Rhino » Mon Dec 31, 2012 2:45 pm

It sounds like you'd still have 80% of your assets outside of TIAA, so I'm guessing you'd still have adequate access to any other funds you may want?
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby sscritic » Mon Dec 31, 2012 3:18 pm

colejr wrote:
Levett wrote:If you go over to the Morningstar TIAA site and place your exact query there, you are likely to receive responses from MSU folks--active and retired.

Thanks, good idea. I may do that, as I will likely find some with experience in the details of the transfer process. I'm also appreciative of the Bogleheads perspective found here.

Many of the people over there are over here, but some show a preference for over there. There are several MSU posters over there; one in particular used to be active over here but now mostly sticks to over there. I am mostly over here and infrequently over there, but I am not MSU.

Edit: I see you posted over there and already have a number of responses; I am going back to read them now.
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby colejr » Mon Dec 31, 2012 3:20 pm

Easy Rhino wrote:It sounds like you'd still have 80% of your assets outside of TIAA, so I'm guessing you'd still have adequate access to any other funds you may want?


Yes, at least for now it's not an issue, all our other money is with Vanguard. The really nice thing about this TIAA-CREF 403(b) is access to the core Vanguard funds I'd want as Institutional shares, along with access to the unique TIAA offerings, e.g. Traditional and TIAA Real Estate. I've been considering this move for some time and don't see a downside, but am very cautious about making changes
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby rjbraun » Mon Dec 31, 2012 4:32 pm

colejr wrote:
Easy Rhino wrote:It sounds like you'd still have 80% of your assets outside of TIAA, so I'm guessing you'd still have adequate access to any other funds you may want?


Yes, at least for now it's not an issue, all our other money is with Vanguard. The really nice thing about this TIAA-CREF 403(b) is access to the core Vanguard funds I'd want as Institutional shares, along with access to the unique TIAA offerings, e.g. Traditional and TIAA Real Estate. I've been considering this move for some time and don't see a downside, but am very cautious about making changes

I currently have some of my holdings at TIAA-CREF, in addition to Vanguard, for the very two funds you cite: TIAA Traditional and TIAA Real Estate. Overall, I'm satisfied with the decision. I think both funds are unique and and I like having some account diversification in where I keep my investments. But I do find Vanguard much better to deal with than TIAA-CREF. I find the latter's toll-free customer service much less efficient and helpful. Also, the website is difficult to navigate and not at all intuitive, imo. They so much as acknowledged this, months ago, and said they were working on improving the site, fwiw.

I too will now go look at the Morningstar / TIAA site to see what information I can glean there!
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby Levett » Mon Dec 31, 2012 4:39 pm

"I am mostly over here and infrequently over there"

But we Loveit when you visit says Levett! :happy
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby colejr » Mon Dec 31, 2012 5:43 pm

rjbraun wrote:But I do find Vanguard much better to deal with than TIAA-CREF. I find the latter's toll-free customer service much less efficient and helpful. Also, the website is difficult to navigate and not at all intuitive, imo. They so much as acknowledged this, months ago, and said they were working on improving the site, fwiw.


Important information and good to know. I agree the main Vanguard website seems better than the TIAA-CREF site, but I never found the Vanguard Retirement Plan site to be very intuitive either. But most of the day-to-day information I've needed from Vanguard has been on their main site and I've rarely gone to the Retirement Plan site, except for allocation changes and rebalancing.
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby runner9 » Mon Dec 31, 2012 7:47 pm

My wife has a 403b from TIAA-CREF as an option at work. Just based on names I'm guessing it's best; we're planning to start contributing in late 2014. On their site I can't find anything about 403b options, is there a standard list or does it very by employer plan?

When it gets closer her employers says to contact TIAA-CREF, open an account with a specific access code and then do the deduction paperwork with payroll.

I'll do the contact TIAA-CREF part well in advance and probably compare with a few others, just curious if I can learn any more details without contacting them this far in advance.
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby Levett » Mon Dec 31, 2012 7:53 pm

runner,

It's going to depend on your wife's plan document.

Check her employer's website for details.

TIAA executes the plan your wife's employer has chosen.

Lev
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Re: 403(b): Vanguard -> TIAA-CREF?

Postby sscritic » Mon Dec 31, 2012 8:00 pm

runner9 wrote:My wife has a 403b from TIAA-CREF as an option at work. Just based on names I'm guessing it's best; we're planning to start contributing in late 2014. On their site I can't find anything about 403b options, is there a standard list or does it very by employer plan?

A 403(b) belongs to your employer. They have a contract, as do you, but your contract must conform to theirs, so your investment choices are set by your employer. State law may also have an impact (it is an insurance contract, after all; at least that's my theory). As I recall, the Real Estate Account was added in California several years after the Real Estate Account was available elsewhere.
Who Can Set Up a 403(b) Account?
You cannot set up your own 403(b) account. Only employers can set up 403(b) accounts.
who wrote that? I will let you choose three letters.
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