Seeking opinions on a reallocation from TIAA-CREF Lifecycle to Vanguard funds [US ex-pat]

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Seeking opinions on a reallocation from TIAA-CREF Lifecycle to Vanguard funds [US ex-pat]

Post by DataStar » Tue May 08, 2018 5:00 pm

Dear Bogleheads,

I am considering a reallocation of my retirement savings from TIAA-CREF Lifecycle funds into cheaper Vanguard funds (where possible), and would very much appreciate your feedback and suggestions. My main goal is to reduce the overall (i.e., weighted) expense ratio of my portfolio.

I have a 403(b) and a Roth IRA account (see details below), which received deposits for 3 years, but no longer (I moved from US to Germany about 4 years ago, probably permanently at this point). Due to this move, my choice of funds in my Roth account is quite limited (or so TIAA tells me). If anyone thinks I could transfer my Roth account to Vanguard, even though I have a foreign address, please let me know.

In case it helps, and to give you the full picture, my main retirement plan in Germany has the following allocations:

60% iShares Core S&P 500 (+0.07% ER)
20% iShares Core MSCI World (+0.20% ER)
20% iShares Global Government Bond (+0.20% ER)

or 72% US equity, 8% mostly developed world (non-US) equity, and 20% G7 countries bonds.

Here are the other details:

Age: 38 (29 years to retirement)

403(b) retirement account: $15,400

Current allocation: 100% Lifecyle 2045 Fund - Institutional Class (+0.45% ER)

Proposed allocation:
65.84% Vanguard Institutional Index Fund Institutional (VINIX, +0.04% ER)
34.16% Vanguard Total Bond Market Index Fund Institutional (VBTIX, +0.04% ER)

Available funds:
TIAA Traditional Annuity - Retirement Choice (current crediting rate is 4.25%)
TIAA Real Estate Account (QREARX, +0.79% ER)
Vanguard Extended Market Index Fund Institutional (VIEIX, +0.06% ER)
Vanguard Total International Stock Index Fund Institutional (VTSNX, +0.09% ER)
Vanguard Short-Term Bond Index Fund Institutional (VBITX, +0.05% ER)


IRA Roth: $10,904
Current allocation: 100% TIAA-CREF Lifecycle 2045 Fund - Retirement Class (+0.7% ER) --> won't be able to come back into it once I move out of it

Proposed allocation:
100% CREF Equity Index Account (R1) (QCEQRX, +0.51% ER)

Available funds:
TIAA Traditional Annuity - IRA (current crediting rate is 1.5%)
TIAA Real Estate Account (QREARX, +0.79% ER)
CREF Bond Market Account (R1) (QCBMRX, +0.58%)
CREF Inflation-Linked Bond Account (R1) (QCILRX, +0.52%)
CREF Global Equities Account (R1) (QCGLRX, +0.61%)
CREF Growth Account (R1) (QCGRRX, +0.53%)
CREF Stock Account (R1) (QCSTRX, +0.58%)


In the proposed allocation, 80% of combined (403b and IRA Roth) savings would go into stocks and 20% would go into bonds. The weighted expense ratio of the proposed allocation is 0.23% vs. the current weighted expense ratio of 0.55%.

Here are my questions:

1) Does my proposed allocation make sense or am I missing something important?
2) Should I include Trad and/or TREA in my portfolio? If so, any suggestions on the allocations?
3) Since I won't be depositing additional money into these accounts, and since I have an active retirement plan in Germany, should I just allocate everything to Trad and be done with it? I think this may be too conservative for my age, but I still wanted to ask.
4) If I can, should I transfer my Roth to, for example, Vanguard or Prudential in order to lower the costs (CREF Equity Index Account R1 has +0.51% ER)?

And of course, if you have other ideas, please let me know. I love to learn :)


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