Hi everyone,
Last year, wanting to have access to TREA and TRAD in my Roth IRA I switched to TIAA. I guess I didn't think about the ER of the VA's too much, but now I'm debating where to keep my equities allocation. Right now it's all in Cref Stock R1. I like the idea of getting 9,000+ different companies working in my portfolio in one fund for simplicity. My only other options would be the U.S. domestic equity index at .3 er or international index at .31 er or the s & p fund at .3 er. I could split the difference 50/50 U.S. and international, because I'd like to be more than market weight globally for equities. Is there a cost difference in a fund that costs .72 v two funds that would cost .61 combined? Is .11 more really going to kill my ROA over 30 plus years? I just feel weird playing a high fee for a global stock fund that basically owns everything publicly traded when other outfits like Vanguard offer cheaper options. Even VT is charging .11 for the etf version now. Are TIAA participants just paying for the TV ads whereas, Vanguard investors aren't? I suppose I'm also paying up for having TREA and TRAD as investment options but as I'm not forced to purchase either of these VA's, so that rationale feels unwise.
TIAA fees with R1 tier options
TIAA fees with R1 tier options
The Best Way to teach your kids about taxes is by eating 30% of their ice cream |
— Bill Murray
Re: TIAA fees with R1 tier options
Are you saying you have a variable annuity within your Roth IRA?
What is the point of purchasing an annuity but then choosing to invest the annuity assets within equities? Is your maximum rate of return capped? Can you lose principle within this vehicle? It seems to me like this choice could cause your asset allocation to be misrepresented, ie: 15% of my equities are within a growth-capped annuity. So your expected risk/return gets thrown off.
I am not criticizing, I just don't have much experience or knowledge with these types of products.
What is the point of purchasing an annuity but then choosing to invest the annuity assets within equities? Is your maximum rate of return capped? Can you lose principle within this vehicle? It seems to me like this choice could cause your asset allocation to be misrepresented, ie: 15% of my equities are within a growth-capped annuity. So your expected risk/return gets thrown off.
I am not criticizing, I just don't have much experience or knowledge with these types of products.
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Re: TIAA fees with R1 tier options
I have R1 also. I use cref stock for simplicity and also lobbied volubly for better options, preferably via Vanguard. I'm told that next month we will receive those additional options, including indexes with much lower fees.
Ps I'm confused about why you only have R1 options in a Roth IRA. Why not just roll it over to Vanguard?
Ps I'm confused about why you only have R1 options in a Roth IRA. Why not just roll it over to Vanguard?
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Re: TIAA fees with R1 tier options
Move that Roth IRA away from TIAA to Vanguard.
TIAA doesn't want IRAs and charges it's highest ERs for them.
Now a 403(b) at TIAA is entirely different and can be low cost...
TIAA doesn't want IRAs and charges it's highest ERs for them.
Now a 403(b) at TIAA is entirely different and can be low cost...
Attempted new signature...
Re: TIAA fees with R1 tier options
Bondman wrote:Are you saying you have a variable annuity within your Roth IRA?
Yes technically, but I can sell it today without a redemption fee. It asks like a mutual fund in the accumulation stage. To me CREF Stock is simply a mutual fund that Google Finance doesn't track. I am counting it like investing in Vanguard's VT etf or a combo of 70% VTI and 30% VXUS. Nothing more complicated than that for me.
What is the point of purchasing an annuity but then choosing to invest the annuity assets within equities? Is your maximum rate of return capped?
Can you lose principle within this vehicle? It seems to me like this choice could cause your asset allocation to be misrepresented, ie: 15% of my equities are within a growth-capped annuity. So your expected risk/return gets thrown off.
I am not criticizing, I just don't have much experience or knowledge with these types of products.
The Best Way to teach your kids about taxes is by eating 30% of their ice cream |
— Bill Murray
Re: TIAA fees with R1 tier options
Yes, I'm thinking about moving some to Vanguard and just keeping the TREA and TRAD assets. Harder to rebalance through. I believe IRA's at TIAA get treated as if you have a group plan with fewer than $40 mil in assets, thus the R1 tier. Admittedly, I just focused on having access to Traditional and Real Estate VA's, I didn't learn about TIAA's new tier structure that occurred in 2015 until I read about it on BH. My other option would be to open up a new IRA account with Vanguard and just put all my TIAA assets between the two funds and rebalance accordingly. Probably easier and faster timewise than doing a partial transfer of assets from TIAA to Vanguard.
The Best Way to teach your kids about taxes is by eating 30% of their ice cream |
— Bill Murray
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- Posts: 413
- Joined: Fri Oct 05, 2007 12:58 pm
Re: TIAA fees with R1 tier options
I use TREA and TRAD in my 403b because they are there and none of the options in my R1 account is especially appealing. If I were you, I would transfer it all to Vanguard and never look back. That's where my ROTH IRA money sits and that's what I would use every time if given the option.basr518 wrote:Yes, I'm thinking about moving some to Vanguard and just keeping the TREA and TRAD assets. Harder to rebalance through. I believe IRA's at TIAA get treated as if you have a group plan with fewer than $40 mil in assets, thus the R1 tier. Admittedly, I just focused on having access to Traditional and Real Estate VA's, I didn't learn about TIAA's new tier structure that occurred in 2015 until I read about it on BH. My other option would be to open up a new IRA account with Vanguard and just put all my TIAA assets between the two funds and rebalance accordingly. Probably easier and faster timewise than doing a partial transfer of assets from TIAA to Vanguard.
Re: TIAA fees with R1 tier options
I agree R1 offerings aren't appealing. I only have access to TIAA via my Roth. Never worked for a non profit or university. So being that TREA and TRAD are unique and appealing to me, I'll be keeping my Roth at TIAA. Also I moved to Canada earlier this year, so I probably can't contribute unless I work again in the states down the road. Kinda leaning towards a new account for equities somewhere else and put the Cref Stock into TRAD. TREA is about 40% of the acct now. Kinda on the high side. AA is currently at 42% Stock 18% TRAD 40% TREA. The new account will then be for bringing up equities quickly. I'm very pessimistic about US stocks. I don't think I'll miss a lot of upside with this strategy.
The Best Way to teach your kids about taxes is by eating 30% of their ice cream |
— Bill Murray
Re: TIAA fees with R1 tier options
I'm leaning towards opening a Vanguard acct in Canada once I'm ready. In the meantime I think I'll use the unique opportunity TIAA gives its participants to nearly fully invest my assests in TRAD and TREA. Angling towards 70% TREA 20% TRAD 10% individual stock. Frontloading assets away from equities will mean I can focus 100% on getting shares of the equivalent to VT with the Vangaurd Canada etf platform and be back in the market. If I miss more upside so what it's not real until you take it out, eh? I think the overall US market is more likely to decline 10% or more than go up another 5%. In the end it's what makes you comfortable as an individual investor regardless of your background. Funny, cost started this for me and TREA is almost an er of .9, but then there's nothing like it. And compared to VNQ is apples to oranges. So goodbye stock market for a little bit. I'll take lower returns and get back in at lower levels. Or take lower returns and get back in and higher grossly inflated levels but DCA'ing.
The Best Way to teach your kids about taxes is by eating 30% of their ice cream |
— Bill Murray