TIAA Traditional

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Foznuts
Posts: 5
Joined: Fri Nov 08, 2013 9:35 pm

TIAA Traditional

Post by Foznuts » Wed Feb 07, 2018 11:03 am

First time posting. Thanks in advance for any thoughts and insight.

I currently have an employer sponsored plan through TIAA. I have an old 403b plan from a previous employer with them too. My window until retirement is 20-25 years. I am trying to decide what to do with the old 403b which currently has about $50k. Annually I contribute 8% of my salary to my current fund and my employer contributes 13%. My wife participates in a state pension plan and has at least 20 years until retirement. She also has a Vanguard account that is currently at $40k. I am comfortable with my current investment mix in my present plan. The main question is whether or not it is worth dedicating the entirety of the old plan to Traditional will provide a sound guaranteed return over time?

Based on what I know and have read on this forum, it seems that the old 403b plan would be a good place to dump everything into TIAA Traditional. This would provide an annual guaranteed return and annuity options as I move toward retirement. Any ideas? This may be too vague, apologies if that is the case.

jmk
Posts: 322
Joined: Tue Nov 01, 2011 7:48 pm

Re: TIAA Traditional

Post by jmk » Wed Feb 07, 2018 11:12 am

TIAA Traditional is a fine addition since it is "stable value"-- different from bonds and CDs but also "safe". I wish I had access to more of it. :) However if you are pleased with your existing Asset Allocation may I suggest you make sure all your funds taken together maintain a suitable AA. If you put all the 403b in Traditional it may skew your AA to be safer than you prefer. For instance if your current plan is 50/50, you might want to split the TIAA 50/50 between Equity index and Traditional. (This is just an example, since I don't know your own overall AA.)
Last edited by jmk on Wed Feb 07, 2018 11:26 am, edited 1 time in total.

Foznuts
Posts: 5
Joined: Fri Nov 08, 2013 9:35 pm

Re: TIAA Traditional

Post by Foznuts » Wed Feb 07, 2018 11:16 am

Thanks. I'm currently at 70/30 in the plan to which I contribute. That will probably move more toward 60/40 in the near future. Any thoughts on how to manage allocation to bonds if I move all the old plan into Traditional? My plan is to maintain a contribution to the Traditional fund annually. I am becoming more conservative, but don't want to go too far.

student
Posts: 1744
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Traditional

Post by student » Wed Feb 07, 2018 11:18 am

Here is a data point. I essentially use TIAA Traditional as the fixed income portion of my asset allocation.

bikechuck
Posts: 247
Joined: Sun Aug 16, 2015 9:22 pm

Re: TIAA Traditional

Post by bikechuck » Wed Feb 07, 2018 11:24 am

student wrote:
Wed Feb 07, 2018 11:18 am
Here is a data point. I essentially use TIAA Traditional as the fixed income portion of my asset allocation.
I am doing this as well but I need to add other Bonds/CDs etc to get the fixed income amount up to where I want it in my portfolio.

jmk
Posts: 322
Joined: Tue Nov 01, 2011 7:48 pm

Re: TIAA Traditional

Post by jmk » Wed Feb 07, 2018 11:24 am

Do you keep a spreadsheet of all your retirement assets? Then you could lump all your "safe" assets and "risky" assets to ensure your overall AA was maintained. You would put all your 403b, IRAs, and taxable monies devoted to retirement into the spreadsheet. If you want 60/40 overall, then the Bond parts of all your funds + retirement CDs + Treasury Bonds + Traditional would be the 40% and the Stock portion of all your funds would be the 60%. If the whole 403b is Traditional excel could easily calculate what the rest of your funds should be to maintain 60/40.

Am I answering your question?

There are other considerations of course, like tax efficiency. Are you keeping any retirement assets in taxable accounts or are they are in retirement accounts? Many folks keep their CDs/bonds/stable value in retirement and most of their equity and municipal bonds in taxable.

livesoft
Posts: 60141
Joined: Thu Mar 01, 2007 8:00 pm

Re: TIAA Traditional

Post by livesoft » Wed Feb 07, 2018 11:30 am

I'm one of those with an old TIAA 403(b) that uses TIAA Traditional Annuity. It is very small part of my overall portfolio.

Sure, go ahead and use TIAA TA in your old 403(b) and leave it alone for awhile. Your $50K will not grow very fast at all, but it also won't lose money. Since it is part of your fixed income asset allocation, it should become a smaller and smaller percentage as your life goes on and you keep contributing to your other accounts. Then in 30 years, you will be answering posts like yours from another person asking whether they should keep an old 403(b) in TIAA traditional annuity.
Wiki This signature message sponsored by sscritic: Learn to fish.

Foznuts
Posts: 5
Joined: Fri Nov 08, 2013 9:35 pm

Re: TIAA Traditional

Post by Foznuts » Wed Feb 07, 2018 11:36 am

Hopefully answering those questions as someone who successfully navigated investing and saving for retirement.

Pistachioicecream
Posts: 41
Joined: Sun Dec 09, 2012 11:08 pm

Re: TIAA Traditional

Post by Pistachioicecream » Wed Feb 07, 2018 11:56 am

You may want to check out the TIAA Funds forum on the Morningstar.com site. A good number of retired (and not retired) academics hang out there and are very knowledgeable about the Traditional account and all things TIAA. When you go to the site, click on "More," then "Discuss > Forums," then scroll down and click on "TIAA Funds."

Pistachio

Post Reply