Pertinent background: I'm 37, will be investing $72k yearly in 403b&457, 90/10 equity/fixed-income allocation. I don't currently have a taxable account and will probably be working on a 20% down payment for a house, but hopefully should be able to get one after that.
- non-liquid (RA) version has 3% guaranteed interest, 4% current crediting rate, must withdraw over 10 years
- fully liquid (GSRA) version has 3% guaranteed interest, 3.25% crediting rate
Although most people recommended the fully liquid TIAA Traditional version, I was intrigued by DrDubious' quite opposite suggestion (viewtopic.php?f=1&t=220125&p=3394458#p3390115):
I realize that even a small change in the earnings will result in a large difference over 20-30 years. Thus, at least for the sake of argument, why NOT invest 100% of my fixed income allocation (10% of the entire portfolio) in the non-liquid TIAA Traditional? I realize that this will limit rebalancing, but folks have convinced me that, at least for the first few years, my monthly contributions will form a significant chunk of my total investment and can be used by themselves to rebalance...DrDubious wrote:Given the higher return, your long horizon, and high cash flow (which I assume isn't going to be hugely sucked up by debt servicing given your aggressive savings plan) I would consider putting all of the "fixed" allocation into the illiquid version of Traditonal. At 10 % of your portfolio with a ton of tax-deferred space, I doubt you are going to feel constrained by the illiquidity, particularly if you have cash on hand and a taxable account. When you consider this money is going to be in a retirement plan, it is presumably somewhat illiquid anyway so you're not giving up too much. Should the interest rate environment change such that bond funds look better than Traditional, you can always change where your new contributions go at that time.
When it is time to increase your "fixed" apportionment, you could consider using the liquid TIAA, get a bond fund via the brokerage window, buy municipal bonds in your taxable account, use savings bonds, etc.