Choosing 403(b) TIAA Investments

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kmstx
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Choosing 403(b) TIAA Investments

Post by kmstx » Fri Jan 19, 2018 4:02 pm

Hi guys! I'm enrolling in the 403(b) plan offered by my employer, but am feeling a little overwhelmed by the investment choices. Could you help me out?

A little background on our financial picture:
- Four month emergency fund
- Student loans at 3.5%
- Truck loan at 3.8%
- Mortgage at 4.5%
- MFJ tax status with a marginal rate of 25% federal and 5% MS for 2017
- I'm 25, husband is 35
- Currently have approx. $4k in a Vanguard IRA, but no other investments
- Also enrolled in pension plan through my employer with 8 year vesting period. Employment started Jan 1 of this year.

I'll be maxing my contributions to the 403(b) and am leaning towards an 80-85/20-15 investment mix, but am open to suggestions. Looking for recommendations on how much to invest internationally vs domestically.

Here is a list of all the investment options. (I think you can also view them by going to www.tiaa.org/msorp)

Investments are ordered in this way:
Fund Name
Product
Performance (1 yr - 5 yr - 10 yr)
Gross Expense Ratio

EQUITIES
American Funds EuroPacific Growth Fund - R6
Mutual Funds
20.63% - 9.51% - 3.60%
0.50%

CREF Equity Index R2
Variable Annuities
18.35% - 13.83% - 7.19%
0.34%

CREF Global Equities R2
Variable Annuities
19.64% - 10.90% - 4.21%
0.44%

CREF Growth R2
Variable Annuities
21.92% - 15.21% - 8.64%
0.38%

CREF Stock R2
Variable Annuities
19.09% - 11.87% - 5.55%
0.43%

Columbia Mid Cap Index Fund Class R5
Mutual Funds
17.24% - 14.20% - 8.81%
0.20%

DFA Emerging Markets Portfolio Mutual Funds
20.98% - 4.06% - 2.14%
0.48%

Eaton Vance Large Cap Value I
Mutual Funds
14.36% - 11.16% - 4.75%
0.81%

Royce Pennsylvania Mutual Fund Institutional Class
Mutual Funds
23.36% - 12.04% - 6.99%
0.84%

FIXED INCOME
CREF Bond Market R2
Variable Annuities
0.74% - 2.21% - 4.03%
0.40%

CREF Inflation-Linked Bond R2
Variable Annuities
-0.50% - -0.42% - 3.43%
0.35%

GUARANTEED
TIAA Traditional
(No other info listed in summary)

MONEY MARKET
CREF Money Market R2
Variable Annuities
0.31% - 0.07% - 0.40%
0.34%

MULTI-ASSET
CREF Social Choice R2
Variable Annuities
10.79% - 8.29% - 5.58%
0.38%

TIAA-CREF Lifecycle 2010 Fund - Institutional Class
Mutual Funds
9.41% - 6.89% - 4.95%
0.38%

TIAA-CREF Lifecycle 2015 Fund - Institutional Class
Mutual Funds
10.36% - 7.52% - 4.97%
0.39%

TIAA-CREF Lifecycle 2020 Fund - Institutional Class
Mutual Funds
11.81% - 8.38% - 5.05%
0.40%

TIAA-CREF Lifecycle 2025 Fund - Institutional Class
Mutual Funds
13.38% - 9.22% - 5.11%
0.41%

TIAA-CREF Lifecycle 2030 Fund - Institutional Class
Mutual Funds
15.04% - 10.02% - 5.14%
0.42%

TIAA-CREF Lifecycle 2035 Fund - Institutional Class
Mutual Funds
16.59% - 10.77% - 5.34%
0.43%

TIAA-CREF Lifecycle 2040 Fund - Institutional Class
Mutual Funds
18.26% - 11.31% - 5.62%
0.44%

TIAA-CREF Lifecycle 2045 Fund - Institutional Class
Mutual Funds
18.88% - 11.44% --%
0.45%

TIAA-CREF Lifecycle 2050 Fund - Institutional Class
Mutual Funds
19.27% - 11.53% --%
0.45%

TIAA-CREF Lifecycle 2055 Fund - Institutional Class
Mutual Funds
19.43% - 11.58% --%
0.45%

TIAA-CREF Lifecycle 2060 Fund - Institutional Class
Mutual Funds
19.60% --% --%
0.45%

TIAA-CREF Lifecycle Retirement Income Fund - Instl Class
Mutual Funds
8.76% - 6.28% - --%
0.38%

REAL ESTATE
TIAA Real Estate
Variable Annuities
4.34% - 8.04% - 2.58%
0.85%


UPDATE:
Okay, I just got an email from the Valic rep with the fund options and now I’m thinking I jumped the gun. HR wanted my form by Monday so it would process for the next payroll period, but I may see if I can change it before they do.

Valic has Vanguard and Fidelity funds. Would those be better options? If I remember correctly, there is a fee if I move funds to another company.

Link to funds: https://drive.google.com/open?id=1Boe08 ... 3q0nGZm_Jl
Last edited by kmstx on Sat Jan 20, 2018 4:06 pm, edited 1 time in total.

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CyclingDuo
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Re: Choosing 403(b) TIAA Investments

Post by CyclingDuo » Fri Jan 19, 2018 6:26 pm

You could easily do the Three Fund Portfolio (actually using only 2 funds - see notes below). Or you could keep it simple in the LifeCycle Fund for your age.

From the Three Fund Portfolio: https://www.bogleheads.org/wiki/Three-f ... ite_note-9

TIAA annuities plans participants can create a three-fund porfolio with only two funds:[note 7]

The Stock fund is comprised of 70% Total US Stock market, 30% total international (excluding US) market, which is 2/3 of a three-fund portfolio.

Stock (70% Russell 3000 / 30% MSCI Allworld ex-US)
Bond (Barclays U.S. Aggregate Bond)

TIAA mutual fund (retail) participants can use:

Equity Index (TINRX)
Emerging Markets Stock Index (TEQKX)
Bond Index Fund (TBILX)
"Everywhere is within walking distance if you have the time." ~ Steven Wright

bogglizer
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Re: Choosing 403(b) TIAA Investments

Post by bogglizer » Fri Jan 19, 2018 6:45 pm

I went for the LifeCycle fund to start off with. My logic was that during the early accumulation phase (first few years), the amount of money is too small to make much difference. Once I accumulate enough that the difference in fees are more than a few dollars a year, then I will re-think my allocations.

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fortfun
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Re: Choosing 403(b) TIAA Investments

Post by fortfun » Fri Jan 19, 2018 6:50 pm

Is Fidelity a choice for you? I know TIAA is used by a lot of colleges/schools. Many also offer Fidelity. Fees are much lower with Fidelity Spartan funds. Do some double checking. If available, you may need to switch during open enrollment. I'm not a big TIAA fan...

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Tyler Aspect
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Re: Choosing 403(b) TIAA Investments

Post by Tyler Aspect » Fri Jan 19, 2018 6:59 pm

The available investment options are wider than TIAA CREF. There's Voya, TIAA CREF, and VALIC. Also PERS as well.

http://www.orp.ms.gov/Pages/Home.aspx

TIAA CREF is best known for their traditional pension product. Its return is guaranteed by TIAA. Because of this guarantee it might not hurt to allocate a bit more than the usual age based formula.

30% Managed by TIAA CREF - TIAA Traditional
70% Managed by VALIC - Vanguard 500 Index (0.04% expense ratio)
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

jasg
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Re: Choosing 403(b) TIAA Investments

Post by jasg » Fri Jan 19, 2018 9:33 pm

I like TIAA. It has two unique options that are hard to match with other firms - TIAA Traditional and TIAA Real Estate.

I use TRAD in place of bond funds - it is a stable value fund, currently yielding 3.25%. If bond yields rise, I will reconsider. I use TRAD, TINRX and TEQKX as my TIAA "Three-fund" portfolio.

TREA is a great way to diversify with something neither stock nor bond. I keep about 12% of my portfolio in TREA.

I started with a TIAA 403b in my mid-twenties too - but only because my employer put in about $2k on my behalf. I moved on and ignored it as I started 401k's with later firms. That little account was 50/50 TRAD and CREF Stock - over the last 38 years it has returned an average of 10% and is over $75k!

kenoryan
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Re: Choosing 403(b) TIAA Investments

Post by kenoryan » Fri Jan 19, 2018 10:39 pm

I have crew stock and cref growth. But it’s only 5% of my net worth.

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Garco
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Re: Choosing 403(b) TIAA Investments

Post by Garco » Fri Jan 19, 2018 10:50 pm

I don't like your mid/small cap options. If you ever are offered better ones (including TIAA MC or SC), consider adding them. * next to item below means that I currently own it. I have better LC options, so I don't own CREF Stock.

I recommend:

30% CREF Stock (70% US; 30% non-US)

15% CREF Social Choice

20% *RERGX (Europacific Growth) (about 25% of RERGX is emerging markets) (RERGX is partly in lieu of TIAA Growth)
5% * DFEVX (DFA Emerging Markets)

10% *TIAA Real Estate (regarded by TIAA aficionados as kind of half equity, half fixed income; but has unique characteristics)

10% *TIAA Traditional (or do 20% and skip CREF Bond) (but be aware Trad has trading restrictions)

10% CREF Bond (or do 20% and skip TIAA Trad)

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jriding
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Re: Choosing 403(b) TIAA Investments

Post by jriding » Fri Jan 19, 2018 11:20 pm

fortfun wrote:
Fri Jan 19, 2018 6:50 pm
Is Fidelity a choice for you? I know TIAA is used by a lot of colleges/schools. Many also offer Fidelity. Fees are much lower with Fidelity Spartan funds. Do some double checking. If available, you may need to switch during open enrollment. I'm not a big TIAA fan...
+1
We switched from TIAA to Fidelity and have saved 1,000s.

kmstx
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Re: Choosing 403(b) TIAA Investments

Post by kmstx » Sat Jan 20, 2018 11:36 am

Thanks for all the responses! I’m mobile, so I’m going to try to respond to each question, but if I forget one, I apologize!

The pension plan I’m enrolled in is PERS.

The 403(b) is optional with no match. My university offered Valic, Voya, Axa and TIAA-CREF as my 403(b) choices and after some research it seemed like TIAA was what people recommended of those four. Am I mistaken?

Fidelity unfortunately is not an option.

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Garco
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Re: Choosing 403(b) TIAA Investments

Post by Garco » Sat Jan 20, 2018 12:45 pm

@kmstx-- IMO, TIAA is definitely the best plan administrator among the options you have. Also, as I reflect on the fact that this may be a supplement to your main pension, I think being a little bit more adventuresome or aggressive in your selection of investment options is OK. At age 25, you are in for the very long run. Perhaps the single most important factor in investing in your plan isn't your selection of specific investments but the overall rate of contributions -- the percentage of your salary/income that you're putting in, across various pension plans and options within them.

In my early years of investing for retirement (which were from about age 30), I maintained a 75-25 ratio of equities to fixed income (and this was initially really just CREF Stock and TIAA Traditional). Only in later years did my plan begin to offer some real alternatives, including a limited number of non-TIAA investments within my TIAA plan. I took advantage of those but also never deviated from a roughly 75% equities to 25% FI within the TIAA plan while I was still working. However, once late in my working career some alternative plans for supplemental investments on top of the base TIAA became available from my employer, I opened up SRA's on top of my TIAA main retirement plan. The landscape I could negotiate for my retirement funds as a whole then expanded a lot. I also started a taxable brokerage account. But by far the largest accumulation that I have now remains my the tax deferred TIAA account.

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Re: Choosing 403(b) TIAA Investments

Post by jasg » Sat Jan 20, 2018 12:51 pm

Garco wrote:
Fri Jan 19, 2018 10:50 pm
10% *TIAA Traditional (or do 20% and skip CREF Bond) (but be aware Trad has trading restrictions)
This can be true but there are two main varieties of TRAD. I have both - one is fully liquid and I move funds in and out at will. The other is limited to 10 periodic withdrawals. Either could be annuitized if I choose to do that.

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Tyler Aspect
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Re: Choosing 403(b) TIAA Investments

Post by Tyler Aspect » Sat Jan 20, 2018 1:48 pm

For TIAA the best product seemed to be the TIAA Traditional; other funds are high cost.

For Voya there's Vanguard Total Stock Market, but no good bond choices.

For VALIC there are wider variety of offering with low costs, with a S&P 500 index and Total Bond Market index.

From the plan document it says you can direct money to two different vendors as long as any one is receiving minimum of 25% contribution.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

HANK1964
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Re: Choosing 403(b) TIAA Investments

Post by HANK1964 » Sat Jan 20, 2018 2:29 pm

My wife and I hold 20% of our equity portion and 10% of our total portfolio in the Real Estate Account and have been very pleased with its performance. (The rest of our portfolio is at Vanguard.) Look at its performance since inception on the TIAA website and you will see, except for the 2008-2009 downturn, it has been a consistent winner. It’s ER of .85 is higher than any of our Vanguard holdings but I feel it is probably due to the holdings within the Real Estate Account.

kmstx
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Re: Choosing 403(b) TIAA Investments

Post by kmstx » Sat Jan 20, 2018 3:03 pm

Okay, I just got an email from the Valic rep with the fund options and now I’m thinking I jumped the gun. HR wanted my form by Monday so it would process for the next payroll period, but I may see if I can change it before they do.

Valic has Vanguard and Fidelity funds. Would those be better options? If I remember correctly, there is a fee if I move funds to another company.

Is there a way to attach a photo or is it okay if I link to a google drive image?

Edited to add: link is in original post!
Last edited by kmstx on Sat Jan 20, 2018 4:07 pm, edited 1 time in total.

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CyclingDuo
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Re: Choosing 403(b) TIAA Investments

Post by CyclingDuo » Sat Jan 20, 2018 3:30 pm

kmstx wrote:
Sat Jan 20, 2018 11:36 am
Thanks for all the responses! I’m mobile, so I’m going to try to respond to each question, but if I forget one, I apologize!

The pension plan I’m enrolled in is PERS.

The 403(b) is optional with no match. My university offered Valic, Voya, Axa and TIAA-CREF as my 403(b) choices and after some research it seemed like TIAA was what people recommended of those four. Am I mistaken?

Fidelity unfortunately is not an option.
You would be fine with TIAA. We use TIAA and VALIC for our own educational 403b/457b plans. I didn't follow the link to the Mississippi plans, but I will assume the VALIC plan has an administrative wrap added on top of the underlying fund fees of something like .18-.20%. Voya will be similar, and AXA will probably be even higher. Even if your VALIC plan offered Vanguard funds, you'd be paying a total of around .22 - .30% for them, so the TIAA is just a tick higher. Either would work fine.

If you put it all in TIAA, at your age of 25 I would do something like this which would fit your age profile:

84% Goes in this fund: CREF Stock R2 ER .43%
6% Goes in this fund: DFA Emerging Markets Portfolio ER .48%
10% Goes in this fund: CREF Bond Market R2 ER .40%

That equals...

54% US Equities
36% International Equities
10% Bond

The CREF stock fund is 70% US Domestic stocks and 30% International. By adding the DFA Emerging Markets fund with 6% of your contributions, your international exposure will be more diverse and include some important international markets not covered by the CREF stock fund. Keep in mind, Emerging Market Funds are some of the most expensive in terms of fees, so the DFA .48% is actually quite an attractive fee. The remaining 10% in the Bond fund is enough for your age and matches the profile of what the Vanguard Target Funds for your age have. The target fund for your age would be the 2055 fund which currently has:

54% US Domestic Equities
36% International Equities
10% Bond

https://investor.vanguard.com/mutual-fu ... rview/1487

If somebody wants to look up the fees for VALIC at that link the OP posted, and post them up, you would be able to compare. Here's what we pay for Vanguard funds at VALIC here in the state plan for education and government employees in Iowa, and I would bet it is a very similar plan to what you would have available in Mississippi:

My wife's 60/40 asset allocation 403b at VALIC

Vanguard Institutional Index Fund 32% (ER .22 - includes administrative fee)
Vanguard Mid Cap Index Institutional 2% (ER .26 - includes administrative fee)
Vanguard Sm Cap Index Admiral 6% (ER .27 - includes administrative fee)
Vanguard Total International Stock Index Fund Admiral 20% (ER .30 - includes administrative fee)
Vanguard Total Bond Market Index Fund Admiral 40% (ER .25 - includes administrative fee)

Bottom line: For every $100K invested at TIAA you would pay around $470 a year in expense ratio fees. For every $100K invested at VALIC you would pay around $280 a year in expense fees. So $18,800 over 40 years compared to $11,200.

Combined with your defined benefit plan pension - probably not a deal breaker to go with either plan. However, saving money where money can be saved is always worth pointing out.
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kmstx
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Re: Choosing 403(b) TIAA Investments

Post by kmstx » Sat Jan 20, 2018 4:09 pm

Thanks cyclingduo!

I would not consider myself financially challenged, but investments are a whole new area for me. I would have never even thought to compare a Vanguard Target fund ratios with what I choose through TIAA.

kmstx
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Re: Choosing 403(b) TIAA Investments

Post by kmstx » Sat Jan 20, 2018 4:18 pm

Garco - as far as percentages go, including my portion of the pension contribution, 70% of my income is going into pre-tax retirement accounts. My employer is contributing another 16% to pension only.

Overall, it only comes out to about 13% of household gross income. Not as high as I want it to be, but we will gradually increase that over the next few years.

kmstx
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Re: Choosing 403(b) TIAA Investments

Post by kmstx » Sun Jan 21, 2018 11:52 am

I want to say thank you again to all of you who responded!

I'm going to go with cycling duo's recommendation for now since I'm kind of crunched for time, but have the Real Estate, Traditional and LifeCycle funds on my "to learn about" list.

One last question: The TRAD has a 2.5% surrender charge which makes me nervous. Is there any reason why I shouldn't be nervous about it?

Billionaire
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Re: Choosing 403(b) TIAA Investments

Post by Billionaire » Sun Jan 21, 2018 12:06 pm

I have a decedent account at TIAA. All the money is invested in the Guaranteed Interest Fund. It's been paying 3% for the entire 5 years I've owned it. I consider it part of my bond allocation.

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CyclingDuo
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Re: Choosing 403(b) TIAA Investments

Post by CyclingDuo » Sun Jan 21, 2018 1:53 pm

kmstx wrote:
Sun Jan 21, 2018 11:52 am
I want to say thank you again to all of you who responded!

I'm going to go with cycling duo's recommendation for now since I'm kind of crunched for time, but have the Real Estate, Traditional and LifeCycle funds on my "to learn about" list.

One last question: The TRAD has a 2.5% surrender charge which makes me nervous. Is there any reason why I shouldn't be nervous about it?
Your suggested 10% balance in bonds for your age is to be used for rebalancing issues. Example, if stocks declined and suddenly your asset allocation had bonds being 15-20% of your TIAA portfolio, you could move some of the bond money into the equity funds to "rebalance" back to your asset allocation of 90% stocks/10% bonds (which will adjust as you age to allocations such as 80/20; 70/30; 60/40, etc...). Or if your equities grew over a period to the point that instead of being 90/10, you were at 98% equities and only 2% bonds - you would rebalance by moving some of the equity money back over into the bond fund to restore your asset allocation percentages.

To be sure that you have the right funds to develop the simple, diverse, and adored Three Fund Portfolio using what is available within your TIAA plan, let's take a look at the options.

Although I listed a couple of ways you could accomplish that in a previous post, there are actually at least 5 ways worth reviewing that you could accomplish it with regard to being cost effective using the lowest cost funds available.

By the way, the full TIAA Boglehead Wiki is here: https://www.bogleheads.org/wiki/TIAA

You really should read that Wiki page, and double check everything for yourself so you are fully aware.


Option 1: The easy one Fund Approach

100% goes here: TIAA-CREF Lifecycle 2055 Fund - Institutional Class ER .45%


Option 2: The easy Two Fund Approach

90% goes here: CREF Stock (70% Russell 3000 / 30% MSCI Allworld ex-US) ER .43%
10% goes here: CREF Bond (Barclays U.S. Aggregate Bond) ER .40%

The CREF Stock fund represents a combination of Total US and Total International (excluding US) funds, which is 2/3 of a Three-fund portfolio. Therefore, a three-fund portfolio can be created using only 2 funds.


Or...Option 3

90% goes here: CREF Global Equities R2 ER .44% (Comparable to Vanguard Total World Stock Index Fund)
10% goes here: CREF Bond (Barclays U.S. Aggregate Bond) ER .40%


Option 4: The easy Three Fund Approach

54% goes in this fund: Equity Index (Russell 3000) ER .34% (Comparable to Vanguard Total Stock Index)
36% goes into these funds: 30% American Funds EuroPacific Growth ER .50%/6% DFA Emerging Markets ER .48%
10% goes in this fund: CREF Bond (Barclays US Aggregate) ER .40%

Option 4 requires using a mix of two non TIAA Funds to get international since there is no TIAA/CREF pure international index fund available.


Or...Option 5

84% Goes in this fund: CREF Stock R2 ER .43%
6% Goes in this fund: DFA Emerging Markets Portfolio ER .48%
10% Goes in this fund: CREF Bond Market R2 ER .40%

Any of these options will do it for you and you will have the diversity of the Three Fund Portfolio, also known as the Second Grader's Portfolio.

It's fun to watch the performance of the Second Grader's Portfolio compared to some other well known "lazy portfolios" here:

https://www.marketwatch.com/lazyportfolio
"Everywhere is within walking distance if you have the time." ~ Steven Wright

ResearchMed
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Re: Choosing 403(b) TIAA Investments

Post by ResearchMed » Sun Jan 21, 2018 2:00 pm

CyclingDuo wrote:
Sun Jan 21, 2018 1:53 pm
kmstx wrote:
Sun Jan 21, 2018 11:52 am
I want to say thank you again to all of you who responded!

I'm going to go with cycling duo's recommendation for now since I'm kind of crunched for time, but have the Real Estate, Traditional and LifeCycle funds on my "to learn about" list.

One last question: The TRAD has a 2.5% surrender charge which makes me nervous. Is there any reason why I shouldn't be nervous about it?
Your suggested 10% balance in bonds for your age is to be used for rebalancing issues. Example, if stocks declined and suddenly your asset allocation had bonds being 15-20% of your TIAA portfolio, you could move some of the bond money into the equity funds to "rebalance" back to your asset allocation of 90% stocks/10% bonds (which will adjust as you age to allocations such as 80/20; 70/30; 60/40, etc...). Or if your equities grew over a period to the point that instead of being 90/10, you were at 98% equities and only 2% bonds - you would rebalance by moving some of the equity money back over into the bond fund to restore your asset allocation percentages.

To be sure that you have the right funds to develop the simple, diverse, and adored Three Fund Portfolio using what is available within your TIAA plan, let's take a look at the options.

Although I listed a couple of ways you could accomplish that in a previous post, there are actually at least 5 ways worth reviewing that you could accomplish it with regard to being cost effective using the lowest cost funds available.

By the way, the full TIAA Boglehead Wiki is here: https://www.bogleheads.org/wiki/TIAA

You really should read that Wiki page, and double check everything for yourself so you are fully aware.


Option 1: Easy one Fund Approach

100% goes here: TIAA-CREF Lifecycle 2055 Fund - Institutional Class ER .45%


Option 2: The easy Two Fund Approach

90% goes here: CREF Stock (70% Russell 3000 / 30% MSCI Allworld ex-US) ER .43%
10% goes here: CREF Bond (Barclays U.S. Aggregate Bond) ER .40%

The CREF Stock fund represents a combination of Total US and Total International (excluding US) funds, which is 2/3 of a Three-fund portfolio. Therefore, a three-fund portfolio can be created using only 2 funds.


Or...Option 3

90% goes here: CREF Global Equities R2 ER .44% (Comparable to Vanguard Total World Stock Index Fund)
10% goes here: CREF Bond (Barclays U.S. Aggregate Bond) ER .40%


Option 4: The easy Three Fund Approach

54% goes in this fund: Equity Index (Russell 3000) ER .34% (Comparable to Vanguard Total Stock Index)
36% goes into these funds: 30% American Funds EuroPacific Growth ER .50%/6% DFA Emerging Markets ER .48%
10% goes in this fund: CREF Bond (Barclays US Aggregate) ER .40%

Option 4 requires using a mix of two non TIAA Funds to get international since there is no TIAA/CREF pure international index fund available.


Or...Option 5

84% Goes in this fund: CREF Stock R2 ER .43%
6% Goes in this fund: DFA Emerging Markets Portfolio ER .48%
10% Goes in this fund: CREF Bond Market R2 ER .40%

Any of these options will do it for you and you will have the diversity of the Three Fund Portfolio, also known as the Second Grader's Portfolio.

It's fun to watch the performance of the Second Grader's Portfolio compared to some other well known "lazy portfolios" here:

https://www.marketwatch.com/lazyportfolio
About comparing the "Second Grader's Portfolio" (or any of the strategies shown in the link), please keep in mind that they tend to differ dramatically in terms of how much is held in bonds.
And, of course, the S&P 500 itself doesn't have any bonds at all.

So aside from whether and how much "slicing and dicing" adds (or doesn't), how much one has in bond/fixed income equivalents is likely to have a dramatic effect, and that does seem to show.

RM
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CyclingDuo
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Re: Choosing 403(b) TIAA Investments

Post by CyclingDuo » Sun Jan 21, 2018 2:20 pm

ResearchMed wrote:
Sun Jan 21, 2018 2:00 pm
https://www.marketwatch.com/lazyportfolio

About comparing the "Second Grader's Portfolio" (or any of the strategies shown in the link), please keep in mind that they tend to differ dramatically in terms of how much is held in bonds.
And, of course, the S&P 500 itself doesn't have any bonds at all.

So aside from whether and how much "slicing and dicing" adds (or doesn't), how much one has in bond/fixed income equivalents is likely to have a dramatic effect, and that does seem to show.

RM
Correct.

Regardless, clicking on the name of each of those lazy portfolios unveils the percentages in each asset class if anyone is confused about the returns and making sure one is comparing apples to apples.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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