Questions about portfolio and TIAA-CREF, old and new

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TheStig
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Questions about portfolio and TIAA-CREF, old and new

Post by TheStig »

Greetings Bogleheads,

I am relatively new to the site, and I have been learning so much from the wealth of information (pun intended) on these forums. I submit for your perusal my current household financial situation, with hopes that the collective will help me clear some fog and get onto a simpler path. Button up your peacoat, the fog is pretty thick in some places below.

Background
• My husband and I are recently married. He & I both had 15 year careers in higher ed, but left those jobs to move to another state. He is now in the private sector, and I found another job in academia. Prior to changing jobs, we each had our portfolios solely in TIAA-CREF. (I grew up in an academic family, so I used to think that TIAA-CREF was where it's at, retirement-wise. So for my new academic job, I opened a 403b with TIAA-CREF (no contributions yet), but then saw that they also offered a 403b7 with Vanguard, so I opened one there too. I plan to contribute to the Vanguard 403b7 instead of the TIAA-CREF. I thought about splitting my contributions half-and-half, and comparing their performance over time, but thought that would be just a little too nerdy, even for me!)

• My father (the academic) died last fall, and I inherited three retirement accounts of three different flavors:
- inherited IRA (recently transferred to Vanguard)
- inherited TIAA Traditional (still at TIAA-CREF as a "Savings and Investment Plan")
- 457b (non-govt) taxable lump sum payout (in a TIAA Direct Money Market acct)
I used some of the lump sum to pay off our remaining CC debt. I will be taking RMDs from the Inherited IRA and the TIAA-CREF account starting this year, based on my life expectancy. This was the kick in the pants I needed to bump up our retirement contributions to the max. I'm just glad that the sudden increase of $61k for my 2015 taxable income happened in January 2015, and not December 2014!

• We're hoping to sell my husband's old house in the old state this year, not expecting a significant loss or profit.
Looking to purchase a house in the next 1-2 years. Housing is expensive where we live now, and I expect a home price of ~$350k. We love our current rental, and it's definitely cheap enough that we can keep saving.

• Our 2014 taxes are already done.

Emergency funds: ~4 months’ worth
Savings: ~$34,000 in a TIAA Direct MM (.80% APY)...
....$20k of which is earmarked for est quarterly taxes starting Apr 2015 (this was the lump sum payout, from which Dad's former employer withheld no taxes)
....$7k is earmarked for engine replacement for my camper van (we'll be able to climb highway grades at speed, whoohoo!)
Debt: Mortgage 107k @ ~4% on his old house. Monthly payment is cheap: $615/mo.
Tax Filing Status: MFJ
Tax Rate: 25% Federal, 9% State
State of Residence: Orygun
My Age: 41
His Age: 52
Combined Gross Salary: $135,000

Portfolio Size: smack dab in the middle of six figures
Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 30% of stocks

New Annual Contributions
$24,000 to his 401k (no match)
$6500 to his TIRA/Roth IRA (yet to open one at Vanguard)
$18,000 to her Vanguard and/or TIAA-CREF 403b (no match)
$5500 to her Vanguard Roth IRA (already done for 2015)
$ ? to her Emeriti RHA?

Taxable Investments: none

HIS
His current 401k (1.26% of total portfolio)
Company match? no
0.24% PBDAX.lw - PIMCO Investment Grade Corporate Bond Fund (Load Waived) - Class A .90
0.38% ACSTX.lw - Invesco Comstock Fund (Load Waived) - Class A .82
0.32% SSgA S&P 500 Index Securities Lending Series - Class IX (no ticker) .71
0.32% SSgA S&P MidCap Index Non-Lending Series - Class J (no ticker) .72
(I've tweaked this once already; he had everything in several super-aggressive high-cost funds)

Funds available in his 401(k)
PBDAX PIMCO Investment Grade Corporate Bond Fund (Load Waived) - Class A 0.90
RRTAX T.Rowe Price Retirement 2010 Fund - Class R 1.09
RRTMX T.Rowe Price Retirement 2015 Fund - Class R 1.13
RRTBX T.Rowe Price Retirement 2020 Fund - Class R 1.17
RRTNX T.Rowe Price Retirement 2025 Fund - Class R 1.20
RRTCX T.Rowe Price Retirement 2030 Fund - Class R 1.23
RRTPX T.Rowe Price Retirement 2035 Fund - Class R 1.25
RRTDX T.Rowe Price Retirement 2040 Fund - Class R 1.26
RRTRX T.Rowe Price Retirement 2045 Fund - Class R 1.26
RRTFX T.Rowe Price Retirement 2050 Fund - Class R 1.26
RRTVX T.Rowe Price Retirement 2055 Fund - Class R 1.26
RRTIX T.Rowe Price Retirement Balanced Fund - Class R 1.07
ACSTX Invesco Comstock Fund (Load Waived) - Class A 0.82
JUEAX JPMorgan U.S. Equity Fund - Class A 0.94
OIGAX Oppenheimer International Growth Fund - Class A 1.15
ALARX Alger Capital Appreciation Institutional Fund - Class I 1.19
DEFIX Delafield Fund 1.22
JGRTX Janus Enterprise Fund - Class S 1.18
SSGSX Victory Small Company Opportunity Fund - Class A 1.35
JGMIX Janus Triton Fund - Class S 1.18
AFJAX AllianzGI NFJ International Value Fund - Class A 1.27
(no ticker) SSgA International Index Securities Lending Series Fund - Class VIII 0.99
(no ticker) Invesco Stable Asset Fund 1.17
(no ticker) SSgA S&P 500 Index Securities Lending Series Fund - Class IX 0.71
(no ticker) SSgA S&P MidCap Index Non-Lending Series Fund - Class J 0.72
(no ticker) SSgA Russell Small Cap Index Securities Lending Series Fund - Class VIII 0.97

His old TIAA-CREF (47.32% of total portfolio)
8.67% CREF Global Equities .47
12.83% CREF Growth .42
16.98% CREF Stock .46
0.62% JLGRX - JPMorgan Large Cap Growth Fund (Class R5) .71
4.07% TIAA Real Estate .87
3.77% TIAA Traditional
0.38% VTIAX - Vanguard Total International Stock Index Fund Admiral Shares .14

Funds available in his old TIAA-CREF
(no ticker) TIAA Real Estate .87
(no ticker) CREF Bond Market .45
(no ticker) CREF Equity Index .39
(no ticker) CREF Global Equities .47
(no ticker) CREF Growth .42
(no ticker) CREF Inflation Linked Bond .41
(no ticker) CREF Money Market .40
(no ticker) CREF Social Choice .41
(no ticker) CREF Stock .46
DHMIX Diamond Hill Small Mid Cap Fund Class I 1.02
EISMX Eaton Vance Atlanta Capital SMID Cap Fund Class I .98
JLGRX JPMorgan Large Cap Growth Fund (Class R5) .71
MWTIX Metropolitan West Total Return Bond Fund (Inst Class) .45
MEIJX MFS Value Fund (Class R4) .65
ODVYX Oppenheimer Developing Markets Fund (Class Y) 1.08
FBNRX Templeton Global Bond Fund (Class R6) .53
TIVRX Thornburg International Value Fund (Class R5) 1.12
TRRFX T.Rowe Price Retirement 2005 Fund .59
TRRAX T.Rowe Price Retirement 2010 Fund .59
TRRGX T.Rowe Price Retirement 2015 Fund .63
TRRBX T.Rowe Price Retirement 2020 Fund .67
TRRHX T.Rowe Price Retirement 2025 Fund .70
TRRCX T.Rowe Price Retirement 2030 Fund .73
TRRJX T.Rowe Price Retirement 2035 Fund .75
TRRDX T.Rowe Price Retirement 2040 Fund .76
TRRKX T.Rowe Price Retirement 2045 Fund .76
TRRMX T.Rowe Price Retirement 2050 Fund .76
TRRNX T.Rowe Price Retirement 2055 Fund .76
TRRIX T.Rowe Price Retirement Balanced Fund .57
VFIAX Vanguard 500 Index Fund Admiral Class .05
VEXAX Vanguard Extended Market Index Fund Admiral Shares .10
VAIPX Vanguard Inflation Protected Securities Fund Admiral Shares .10
VBTLX Vanguard Total Bond Market Index Fund Admiral Shares .08
VTIAX Vanguard Total International Stock Index Fund Admiral Shares .14


MINE
Her current Vanguard 403(b)(7) (0% of total)
I just opened the account and have yet to contribute.
Company match? no

Her current TIAA-CREF 403(b) (0% of total)
I just opened the account and have yet to contribute.
Company match? no

Her Inherited IRA at Vanguard
12.98% Wellington Admiral shares (VWENX) .18
RMDs start this year.

Her Roth IRA at Vanguard
3.15% Total Stock Market Admiral shares (VTSAX) .05

Her Inherited TIAA Traditional SIP “Savings & Investment Plan”
11.13% (no obvious fee, guaranteed 3% return)
RMDs start this year.

Her old TIAA-CREF (24.17% of total)
…it gets complicated, with 5 different accounts:
edited to reflect new R2 tier effective 4/24/2015
• 11.54% RA: TTFRX - Lifecycle 2045 Retirement Class .71
• 2.20% GSRA: (no ticker) CREF Equity Index .39
• 9.95% Defined Contribution RA:
- 1.96% *CREF Global Equities* .48
- 1.77% *CREF Growth* .425
- 4.04% CREF Stock .46
- 1.31% *CREF Inflation-Linked Bond* .415
- 0.87% *TIAA Real Estate* .87
*** I cannot transfer anything into these asterisked holdings, and if I transfer anything out, I cannot put assets back in. In other words, it’s a one-way door out.
• Emeriti Retirement Health Account (employer contributions)
- 0.11% TTFRX - Lifecycle 2045 Retirement Class .71 (PLUS addtl $11.67 monthly management fee)
• Emeriti Retirement Health Account (after-tax employee contributions)
- 0.37% TTFRX - Lifecycle 2045 Retirement Class .71 (no extra monthly fees) ** I am still able to contribute to this account! **


Funds available in her old TIAA-CREF
RA, GSRA & DC RA:
edited to reflect new R2 tier effective 4/24/2015
(no ticker) CREF Equity Index .395
(no ticker) CREF Stock .46
TRGIX TIAA-CREF Growth & Income Fund - Rtmt Class .70
TRERX TIAA-CREF International Equity Fund - Rtmt Class .76
TRIEX TIAA-CREF International Equity Index Fund - Rtmt Class .32
TRLCX TIAA-CREF Large-Cap Value Fund - Rtmt Class .70
TRSEX TIAA-CREF Small-Cap Equity Fund - Rtmt Class .80
TCBRX TIAA-CREF Bond Plus Fund - Rtmt Class .58
TIKRX TIAA-CREF Inflation-Linked Bond Fund - Rtmt Class .52
(no ticker) TIAA Traditional (currently earning 3.5% - unless I'm misunderstanding how this works)
(no ticker) CREF Money Market .41
(no ticker) CREF Social Choice .43
TCLEX TIAA-CREF Lifecycle 2010 Fund - Rtmt Class .64
TCLIX TIAA-CREF Lifecycle 2015 Fund - Rtmt Class .65
TCLTX TIAA-CREF Lifecycle 2020 Fund - Rtmt Class .66
TCLFX TIAA-CREF Lifecycle 2025 Fund - Rtmt Class .68
TCLNX TIAA-CREF Lifecycle 2030 Fund - Rtmt Class .69
TCLRX TIAA-CREF Lifecycle 2035 Fund - Rtmt Class .70
TCLOX TIAA-CREF Lifecycle 2040 Fund - Rtmt Class .71
TTFRX TIAA-CREF Lifecycle 2045 Fund - Rtmt Class .71
TLFRX TIAA-CREF Lifecycle 2050 Fund - Rtmt Class .71
TTRLX TIAA-CREF Lifecycle 2055 Fund - Rtmt Class .71
TLIRX TIAA-CREF Lifecycle Retirement Income Fund - Rtmt Class .63
(or a TIAA-CREF Self Directed Brokerage Account)

RHA:
(no ticker) TIAA-CREF Money Market Fund - Rtmt Class .38
TCLEX TIAA-CREF Lifecycle 2010 Fund - Rtmt Class .64
TCLIX TIAA-CREF Lifecycle 2015 Fund - Rtmt Class .65
TCLTX TIAA-CREF Lifecycle 2020 Fund - Rtmt Class .66
TCLFX TIAA-CREF Lifecycle 2025 Fund - Rtmt Class .68
TCLNX TIAA-CREF Lifecycle 2030 Fund - Rtmt Class .69
TCLRX TIAA-CREF Lifecycle 2035 Fund - Rtmt Class .70
TCLOX TIAA-CREF Lifecycle 2040 Fund - Rtmt Class .71
TTFRX TIAA-CREF Lifecycle 2045 Fund - Rtmt Class .71
TLFRX TIAA-CREF Lifecycle 2050 Fund - Rtmt Class .71
TTRLX TIAA-CREF Lifecycle 2055 Fund - Rtmt Class .71
TLIRX TIAA-CREF Lifecycle Retirement Income Fund - Rtmt Class .63


Funds available in her new Vanguard 403b:
All Investor shares, if there's a choice
VFINX 500 Index Fund .17
VBINX Balanced Index Fund .24
VCVLX Capital Value Fund .47
VCVSX Convertible Securities .63
VDVIX Developed Markets Index .20
VDEQX Diversified Equity .40
VDAIX Dividend Appreciation Index .20
VDIGX Dividend Growth Fund .31
VGOVX Emerging Markets Gov Bond Index .49
VMMSX Emerging Markets Select Stock Fund .94
VEIEX Emerging Markets Stock Index .33
VGENX Energy Fund .38
VEIPX Equity Income Fund .29
VEURX European Stock Index .26
VEXPX Explorer Fund Investor .52
VEVFX Explorer Value Fund .66
VEXMX Extended Market Index .24
VFWIX FTSE All World ex-US .30
VFSVX FTSE All World ex-US Small Cap Index .40
VFTSX FTSE Social Index .27
VHGEX Global Equity Fund .61
VGXRX Global ex-US Real Estate Index .40
VMVFX Global Minimum Vol Investor .30
VFIIX GNMA Fund Investor .21
VQNPX Growth & Income .37
VIGRX Growth Index .24
VGHCX Health Care Fund .35
VHDYX High Dividend Yield Index Investor .19
VWEHX High Yield Corp Fund .23
VIPSX Inflation-Protected Securities .20
VBIIX Intermediate Term Bond Index .20
VFICX Intermediate-Term Investment-Grade .20
VFITX Intermediate-Term Treasury .20
VINEX Intl Explorer Fund .36
VWIGX Intl Growth .47
VTRIX Intl Value Fund .43
VLACX Large Cap Index Fund .24
VSCGX LifeStrategy Conservative Growth .15
VASGX LifeStrategy Growth Fund .17
VASIX LifeStrategy Income Fund .14
VSMGX LifeStrategy Moderate Growth .16
VBLTX Long-Term Bond Index .20
VWESX Long-Term Investment Grade .22
VUSTX Long-Term Treasury .20
VMGRX Mid-Cap Growth Fund .51
VMGIX Mid-Cap Growth Index .24
VIMSX Mid-Cap Index Fund .24
VMVIX Mid-Cap Value Index .24
VMRGX Morgan Growth Fund .40
VPACX Pacific Stock Index .26
VGPMX Precious Metals & Mining .25
VGSIX REIT Index Fund .24
VASVX Selected Value Fund .44
VBISX Short-Term Bond Index .20
VSGBX Short-Term Federal .20
VTIPX Short Term Inflation Protected Securities Index .20
VFSTX Short-Term Investment-Grade .20
VFISX Short-Term Treasury .20
VISGX Small Cap Growth Index .24
NAESX Small Cap Index Fund .24
VISVX Small Cap Value Index .24
VGSTX STAR Fund .34
VSEQX Strategic Equity Fund .27
VSTCX Strategic Small-Cap Equity .38
VTINX Target Retirement Income .16
VTENX Target Retirement 2010 .16
VTXVX Target Retirement 2015 .16
VTWNX Target Retirement 2020 .16
VTTVX Target Retirement 2025 .17
VTHRX Target Retirement 2030 .17
VTTHX Target Retirement 2035 .18
VFORX Target Retirement 2040 .18
VTIVX Target Retirement 2045 .18
VFIFX Target Retirement 2050 .18
VFFVX Target Retirement 2055 .18
VTTSX Target Retirement 2060 .18
VBMFX Total Bond Market Index .20
VTIBX Total Intl Bond Index .23
VGTSX Total Intl Stock Index .22
VTSMX Total Stock Market Index .17
VTWSX Total World Stock Index .30
VWUSX US Growth Fund Investor .44
VUVLX US Value Fund .29
VUBFX Ultra-Short-Term Bond .20
VIVAX Value Index Fund .24
VWINX Wellesley Income Fund .25
VWELX Wellington Fund .26
VWNDX Windsor Fund .37
VWNFX Windsor II Fund .36

Funds Available in her new TIAA-CREF 403b:
edited to reflect new R1 tier effective 4/24/2015
CREF Equity Index .595
CREF Global Equities .68
CREF Growth .625
CREF Stock .66
CREF Bond Market .66
CREF Inflation-Linked Bond .615
TIAA Traditional (currently earning 3.5% - unless I'm misunderstanding how this works)
TIAA Real Estate .87

Goals:
1. Simplify!
2. Save for house downpayment in a couple years - probably $70k.
3. Retirement for me in ~25 years, him in ~15-20 years.

Questions:
1. Should he open a Roth or Trad IRA?
2. How best to simplify the AA in the accounts we have, both old and new?
3. Regarding TIAA-CREF:
- Should we roll out some of our TIAA-CREF assets to Vanguard?
- What makes sense to roll out of each of our plans? What makes sense to keep? (His account has better investment choices than mine does, now that I compare them; and my TIAA-CREF accounts are a lot fussier than I want my finances to be.)
- What is the best strategy for simplifying what we do keep in TIAA-CREF?
- Should I keep the RHA account(s)? Should I contribute to the open RHA Emeriti account?
- The SIP (inherited TIAA) is currently earning a guaranteed 3%. It looks like I may be able to change the investments in that account to other TIAA-CREF holdings. I'm not sure if there are any drawbacks/fees/penalties to doing that. Should I keep it as a guaranteed 3%, or reinvest in something else? I don't think I can roll it out to Vanguard, but I can check on that.
4. Should I take my RMDs from only one inherited account, or both? Which one, and why?

If you've read this far without your eyes crossing, you have my thanks and admiration. I will gratefully accept any guidance offered. Thanks in advance!

The Stig
-=-=-=-=-=-
edit: updated info on His current 401k funds
edit: cleaned up TIAA-CREF info, added previously ignored new TIAA-CREF options
Last edited by TheStig on Tue Feb 24, 2015 12:03 pm, edited 3 times in total.
User avatar
Topic Author
TheStig
Posts: 41
Joined: Mon Jan 19, 2015 11:55 pm

Re: Questions about portfolio and TIAA-CREF, old and new

Post by TheStig »

I had a middle-of-the-night idea, and thought I'd post it as a follow-up question. Regarding some TIAA-CREF choices, I've found this recent topic viewtopic.php?f=1&t=158973 to be very interesting, and timely for my situation. Regarding my former employer TIAA-CREF accounts, and the particular holdings I'm not allowed to transfer into:
Her old TIAA-CREF (24.17% of total)
…it gets complicated, with 5 different accounts:
• 11.54% RA: TTFRX - Lifecycle 2045 Retirement Class .71
• 2.20% GSRA: (no ticker) CREF Equity Index .39
• 9.95% Defined Contribution RA:
- 1.96% *CREF Global Equities* .47
- 1.77% *CREF Growth* .42
- 4.04% CREF Stock .46
- 1.31% *CREF Inflation-Linked Bond* .41
- 0.87% *TIAA Real Estate* .87
*** I cannot transfer anything into these asterisked holdings, and if I transfer anything out, I cannot put assets back in. In other words, it’s a one-way door out.
• Emeriti Retirement Health Account (employer contributions)
- 0.11% TTFRX - Lifecycle 2045 Retirement Class .71 (PLUS addtl $11.67 monthly management fee)
• Emeriti Retirement Health Account (after-tax employee contributions)
- 0.37% TTFRX - Lifecycle 2045 Retirement Class .71 (no extra monthly fees) I am still able to contribute to this account!
Many participants on these forums regard TIAA Trad and TIAA Real Estate as special beasts, and ones to hold onto if possible. I mentioned in my orig post that I recently started a new job, and first opened a TIAA-CREF account (Variable Annuity GSRA, if that matters), but then decided on Vanguard 403b instead. I still have both, and have yet to contribute to either.

My additional questions are:
1. If I split my new 403b contributions between Vanguard and TIAA-CREF, should I allocate my TIAA-CREF contributions solely toward TIAA Real Estate and TIAA Trad?
My thinking is that I can concentrate more on equities in my other investments.
2. Should I then transfer my old T-C holdings (specifically the first two RA & GSRA accounts) to Vanguard to take advantage of lower ERs?
3. I can also transfer some of my existing holdings in the RA & GSRA accts to TIAA Trad. What are the arguments for and against that action?

Is this a good idea? A workable idea? If it's a bad idea, stop me before I attempt anything! Thanks in advance for any guidance you can give me.
-=-=-=-=-
The Stig
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Topic Author
TheStig
Posts: 41
Joined: Mon Jan 19, 2015 11:55 pm

Re: Questions about portfolio and TIAA-CREF, old and new

Post by TheStig »

Anyone? :confused

Or are my questions too fussy and long-winded?
Beth*
Posts: 734
Joined: Wed Apr 30, 2014 9:57 am

Re: Questions about portfolio and TIAA-CREF, old and new

Post by Beth* »

You have a lot of options. I think it would be helpful to take a step back and think about what your want your asset allocation to be. What percentage stocks? international stocks? bonds? stable value? real estate? Do some reading and think about it.

Once you have a sense of how you want to allocate your money it becomes easier to decide what the best funds are to meet that strategy and whether it makes sense for you to contribute to TIAA-CREF or just the Vanguard funds.

In the meantime, you should start contributing to your new retirement accounts. In my opinion it's hard to go wrong with the Vanguard Moderate Growth Fund. You may decide later it's not the exact asset allocation you want but if it's in a retirement account that is easy to fix. Once you know your desired asset allocation we can also advise you on your existing funds.
ralph124cf
Posts: 2985
Joined: Tue Apr 01, 2014 11:41 am

Re: Questions about portfolio and TIAA-CREF, old and new

Post by ralph124cf »

One thing to be aware of: When you deposit any money into TIAA traditional, you can only get out it as some type of annuity. You cannot roll it over to an IRA or to a Vanguard 401(k), or even to other CREF funds.

Ralph
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Topic Author
TheStig
Posts: 41
Joined: Mon Jan 19, 2015 11:55 pm

Re: Questions about portfolio and TIAA-CREF, old and new

Post by TheStig »

Beth* wrote:You have a lot of options. I think it would be helpful to take a step back and think about what your want your asset allocation to be. What percentage stocks? international stocks? bonds? stable value? real estate? Do some reading and think about it.

Once you have a sense of how you want to allocate your money it becomes easier to decide what the best funds are to meet that strategy and whether it makes sense for you to contribute to TIAA-CREF or just the Vanguard funds.

In the meantime, you should start contributing to your new retirement accounts. In my opinion it's hard to go wrong with the Vanguard Moderate Growth Fund. You may decide later it's not the exact asset allocation you want but if it's in a retirement account that is easy to fix. Once you know your desired asset allocation we can also advise you on your existing funds.
Actually I already have, which was near the top of my original post:
TheStig wrote: Desired Asset allocation: 70% stocks / 30% bonds
Desired International allocation: 30% of stocks
Contributing to the new accounts is on hold for now, since I am on FMLA for a couple months, caring for my mother in another state across the country. That's how I have time to hang out on this forum these days. :) So I won't be receiving a regular paycheck again until May 1. I'll be back at work in enough time to specify retirement contributions for the remaining 8 monthly paychecks of the year, totalling $18k.
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alec
Posts: 3178
Joined: Fri Mar 02, 2007 1:15 pm

Re: Questions about portfolio and TIAA-CREF, old and new

Post by alec »

Here are my thoughts, FWIW.
Questions:
1. Should he open a Roth or Trad IRA?
Since he's covered by a 401(k) plan at work, I'm not sure the Traditional IRA will be deductible, so I'd go with the Roth IRA - looks like you're under the income limits for a Roth, but check on that.
2. How best to simplify the AA in the accounts we have, both old and new
3. Regarding TIAA-CREF:
- Should we roll out some of our TIAA-CREF assets to Vanguard?
- What makes sense to roll out of each of our plans? What makes sense to keep? (His account has better investment choices than mine does, now that I compare them; and my TIAA-CREF accounts are a lot fussier than I want my finances to be.)
- What is the best strategy for simplifying what we do keep in TIAA-CREF?
Well, if you want really simple, you could simply roll all the old retirement plans over to Vanguard into an IRA and contribute to your new 403(b) with Vanguard, so then you'd only have two places with retirement money (his 401(k) and your Vanguard accounts).

It looks to me like you have

Her current 403(b) - 0%
Her Inherited IRA at Vanguard - 12.98%
Her Roth IRA at Vanguard - 3.15%
Her Inherited TIAA Traditional SIP “Savings & Investment Plan” - 11.13%
Her old TIAA-CREF - 24.17%
His old TIAA-CREF - 47.32%
His current 401k - 1.26%

I'd forget about how the money is currently allocate right now, and just think about what you want - i.e. 70% stocks and 30% bonds. Then go about allocating the money across the accounts. For example, if you wanted to stay with TIAA-CREF for the access to TIAA Traditional and TIAA Real estate, you could just put all the SIP and your old 403(b) into TIAA, which would bring you to 35% bonds. Then allocate the remaining money in the other accounts into equities (and TIAA RE if you so desire). Then, as you take the RMD's from your father's IRA and SIP, and I'm assuming use this money to offset spending to contribute to other retirement plans, rebalance to get closer to 30% bonds.

In all the other accounts used for equities, just go with the least expensive options, which look like the index funds in your hubby's 401(k), and the admiral shares in his 403(b), and maybe CREF stock or the Int'l index fund in your old 403(b).

I think you may have been getting caught up in what is currently in the accounts (I think it's called anchoring).

That's all I have time for now. Hopefully, I'll be back later. :D

Alec
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair
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Topic Author
TheStig
Posts: 41
Joined: Mon Jan 19, 2015 11:55 pm

Re: Questions about portfolio and TIAA-CREF, old and new

Post by TheStig »

alec wrote:Here are my thoughts, FWIW.
Questions:
1. Should he open a Roth or Trad IRA?
Since he's covered by a 401(k) plan at work, I'm not sure the Traditional IRA will be deductible, so I'd go with the Roth IRA - looks like you're under the income limits for a Roth, but check on that.
I did some calculations last night, just to make sure, and our projected AGI for 2015 is $152k, so we're good, if things hold steady.
2. How best to simplify the AA in the accounts we have, both old and new
3. Regarding TIAA-CREF:
- Should we roll out some of our TIAA-CREF assets to Vanguard?
- What makes sense to roll out of each of our plans? What makes sense to keep? (His account has better investment choices than mine does, now that I compare them; and my TIAA-CREF accounts are a lot fussier than I want my finances to be.)
- What is the best strategy for simplifying what we do keep in TIAA-CREF?
Well, if you want really simple, you could simply roll all the old retirement plans over to Vanguard into an IRA and contribute to your new 403(b) with Vanguard, so then you'd only have two places with retirement money (his 401(k) and your Vanguard accounts).

It looks to me like you have

Her current 403(b) - 0%
Her Inherited IRA at Vanguard - 12.98%
Her Roth IRA at Vanguard - 3.15%
Her Inherited TIAA Traditional SIP “Savings & Investment Plan” - 11.13%
Her old TIAA-CREF - 24.17%
His old TIAA-CREF - 47.32%
His current 401k - 1.26%

I'd forget about how the money is currently allocate right now, and just think about what you want - i.e. 70% stocks and 30% bonds. Then go about allocating the money across the accounts. For example, if you wanted to stay with TIAA-CREF for the access to TIAA Traditional and TIAA Real estate, you could just put all the SIP and your old 403(b) into TIAA, which would bring you to 35% bonds. Then allocate the remaining money in the other accounts into equities (and TIAA RE if you so desire). Then, as you take the RMD's from your father's IRA and SIP, and I'm assuming use this money to offset spending to contribute to other retirement plans, rebalance to get closer to 30% bonds.

In all the other accounts used for equities, just go with the least expensive options, which look like the index funds in your hubby's 401(k), and the admiral shares in his 403(b), and maybe CREF stock or the Int'l index fund in your old 403(b).

I think you may have been getting caught up in what is currently in the accounts (I think it's called anchoring).

That's all I have time for now. Hopefully, I'll be back later. :D

Alec
Alec, thank you so much for your thoughtful response.

Upon reflection, I think you're right on two counts: I like the idea of thinking broadly about asset allocation in big chunks; I think that's the guidance I was hoping for, even if I couldn't articulate it. And I certainly am getting too caught up in the current accounts' holdings and options - it's quite a mental logjam! - and there is a bit of an emotional and mental block about making such large changes. I will step back and do some squinting, and think about broad percentages. I'll post an update then.

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TheStig
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Re: Questions about portfolio and TIAA-CREF, old and new

Post by TheStig »

ralph124cf wrote:One thing to be aware of: When you deposit any money into TIAA traditional, you can only get out it as some type of annuity. You cannot roll it over to an IRA or to a Vanguard 401(k), or even to other CREF funds.

Ralph
Hi Ralph, Thanks for your reply. I am aware of this, and my thoughts were: If I'm not going to be touching it for 25 years anyway, and if we have equities in the rest of our portfolio, then why not? Wouldn't it count as a bond-like option (as Alec suggested in his post above)?

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Re: Questions about portfolio and TIAA-CREF, old and new

Post by anonenigma »

ralph124cf wrote:One thing to be aware of: When you deposit any money into TIAA traditional, you can only get out it as some type of annuity. You cannot roll it over to an IRA or to a Vanguard 401(k), or even to other CREF funds.

Ralph
I don't believe that this is correct. I have the TIAA Traditional in both my 403b and my Roth IRA, and I can move it into other investments and make withdrawals whenever I want.
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House Blend
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Re: Questions about portfolio and TIAA-CREF, old and new

Post by House Blend »

TheStig wrote:Or are my questions too fussy and long-winded?
Yes, and they don't have simple answers. ;-)

I agree with Alec's post; here's my way of expressing similar ideas, on the investment side of things:

1. Make sure you understand the difference between holding TIAA Traditional in a (G)SRA vs. a (G)RA. The latter has restrictions on transfers out, and pays more.

2. (This is the hard part. Not something you can do in 5 minutes.) Settle on an Asset Allocation you are comfortable with. If simplicity is your goal, I would suggest, at the top level, setting:

X% in equity
Y% in TIAA Real Estate (setting Y=0 is ok)
Z% in fixed income

Then, within fixed income, settle on some percentage of it to hold in TIAA Traditional. 0% is ok. Also, for a Boglehead who intends to rebalance periodically, having 100% of fixed income in the restricted form of Traditional is not ok.

Within equity, settle on a fixed percentage to hold in international.

3. Having done the hard work in Step 2, check to be sure that you have adequate space in current or old TIAA-CREF accounts to hold your targeted allocations to Traditional and Real Estate, allowing for anticipated future portfolio growth.

Now, look to fill out the rest of your portfolio with the best index funds available anywhere among your respective plans old and new, and IRAs. Generally for index funds, best == lowest ER. This might mean having your spouse's 401k filled 100% with a bond index fund, or 100% with an S&P 500 index fund, or any number of other possibilities. It also might mean rolling over all of your old T-C accounts to a Vanguard IRA, and investing in Admiral shares of Total Bond, Total Stock, or Total International.

There's no particular reason (IMO) to keep money at T-C that could be transferred elsewhere, unless: (a) you need that money in order to hold as much Traditional or Real Estate as your AA calls for, or (b) your T-C plan offers outstanding low cost index funds that are as good or better as you can get elsewhere.

Example: I see that at his old T-C account, he has access to Admiral shares of Vanguard Total Bond, Total International, 500 index and Extended Markets. So, if you can use those funds as part of your overall AA, there's no urgent need to roll that money elsewhere. Those are cheap index funds, and any Boglehead would prefer those to the CREF variable annuities he is currently using there.
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Re: Questions about portfolio and TIAA-CREF, old and new

Post by The Wizard »

Way to much detail in the first post to allow one quickly to grasp the key questions.
And I say this even though it follows the recommended format here.

I do like holding a significant percentage of TREA, so consider that. House Blend's analysis seems good, so go with that...
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Re: Questions about portfolio and TIAA-CREF, old and new

Post by ourbrooks »

TheStig wrote:
ralph124cf wrote:One thing to be aware of: When you deposit any money into TIAA traditional, you can only get out it as some type of annuity. You cannot roll it over to an IRA or to a Vanguard 401(k), or even to other CREF funds.

Ralph
Hi Ralph, Thanks for your reply. I am aware of this, and my thoughts were: If I'm not going to be touching it for 25 years anyway, and if we have equities in the rest of our portfolio, then why not? Wouldn't it count as a bond-like option (as Alec suggested in his post above)?

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The Stig
Not quite right, unless you stick to the formal definition of annuity, e.g., a set of periodic payments. Most plans allow you to take funds out of TIAA Traditional over ten years. Given the other posts, some plans may allow you to move it any time. All TIAA plans are different; check whether yours allows moving out of TIAA Traditional.

Even if you could move easily into/out of TIAA Traditional, you probably couldn't use it effectively for rebalancing, because the value never changes. It won't go up when stocks go down or vice versa. Because of its stability, some people who hold TIAA Traditional don't bother with rebalancing but simply hold a higher percentage of stocks. Rebalancing reduces the loss in returns you'd take by holding more bonds, but it doesn't reduce it all the way. You'll always get higher returns by holding more stocks and not rebalancing than holding less stocks and rebalancing.
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Re: Questions about portfolio and TIAA-CREF, old and new

Post by alec »

On to the other questions. :D
- Should I keep the RHA account(s)? Should I contribute to the open RHA Emeriti account?
What is this? Some sort of pre or post tax defined contribution account? Does it get any special tax breaks to pay for medical expenses when you retire?
- The SIP (inherited TIAA) is currently earning a guaranteed 3%. It looks like I may be able to change the investments in that account to other TIAA-CREF holdings. I'm not sure if there are any drawbacks/fees/penalties to doing that. Should I keep it as a guaranteed 3%, or reinvest in something else? I don't think I can roll it out to Vanguard, but I can check on that.
similar to my comments above, it might be easier just to leave this in TIAA and take RMDs.
4. Should I take my RMDs from only one inherited account, or both? Which one, and why?
I don't know all the rules around RMDs from inherited accounts, but if you can pick and choose, i'm not sure it really matters.
My additional questions are:
1. If I split my new 403b contributions between Vanguard and TIAA-CREF, should I allocate my TIAA-CREF contributions solely toward TIAA Real Estate and TIAA Trad?
My thinking is that I can concentrate more on equities in my other investments.
2. Should I then transfer my old T-C holdings (specifically the first two RA & GSRA accounts) to Vanguard to take advantage of lower ERs?
3. I can also transfer some of my existing holdings in the RA & GSRA accts to TIAA Trad. What are the arguments for and against that action?
Similar to my comments above, if you want access to TIAA and TIAA RE, then I'd keep the old accounts at TC. I don't think I'd split the new contributions b/w two investment firm since that just complicates everything. Your new TC options look like the regular old TC annuity accounts, which aren't nearly as cheap as the Vanguard index funds you'd have access to. Also, besides the Int'l equity index fund in your old 403(b), the options don't look that inexpensive.

At work today, I thought of another alternative. Why not just move everything to TIAA-CREF, in IRAs, etc? That way you'd have everything at one place. Of course, this assumes that you will have access to TC's cheaper index mutual funds in the IRAs. TC's website was pretty vague about this, so do some due diligence.

As other have said above, some versions of TIAA Traditional (RA & GRA), have withdrawl restrictions, while others (SRA, GSRA) may not. It really all depends on the contract b/w you, your old employer, and TC. As long as you plan far enough ahead (like 10 years), you can start the TPA payouts (9 years and 1 day) before retirement if you don't want to annuitize the TIAA money.

Finally, as to your hubby's new 401(k), I'd just go with one or two of the cheapest options (i.e. the least worst options), which looks like the either the S&P 500 or midcap index fund.

-Alec
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair
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