TIAA questions [GRA (Group Retirement Annuity) payout options]

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spdoublebass
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TIAA questions [GRA (Group Retirement Annuity) payout options]

Post by spdoublebass » Thu Sep 13, 2018 4:59 pm

My wife and I each have a 403B with TIAA. These accounts represent a small portion of our overall portfolio because we are not Full time professors.

Our University switched our titles and now we qualify for an ORP (Optional Retirement Program). We must contribute 3% of our income and the University matches with an additional 8% contribution.

This is still not a whole lot of money, I just want to be clear about that part.

The question I have is this:
In our 403B's we use TIAA Traditional (GRSA) 3% guaranteed, and has been getting 3.25%. This is fully liquid.

In the ORP, I have access to the GRA version of Traditional with 4% guarnteed. I know this is not liquid. My question is this version automatically an annuity? or can I take the 10 year payout when I'm eligible instead of annuitizing?

My other option is to go with Fidelity. I can get a cheap SP500 index and bond fund there. However, I do like the TIAA Traditional, but am afraid about being locked in to something I don't fully understand. I could always rebalance with the GRSA when the time comes. The cheapest equity index in TIAA is a Russell 3000 index for .15% ER.

I was thinking of splitting some between the GRSA and GRA. But I still get a little afraid of not fully understanding the GRA.

Thanks for any help.
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22twain
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Re: TIAA questions

Post by 22twain » Thu Sep 13, 2018 5:48 pm

spdoublebass wrote:
Thu Sep 13, 2018 4:59 pm
In the ORP, I have access to the GRA version of Traditional with 4% guarnteed.
Are you sure that's the guaranteed minimum, rather than what it happens to be paying right now? I'd expect the guarantee to be something like 3.25% for a GRA or RA contract.
I know this is not liquid. My question is this version automatically an annuity? or can I take the 10 year payout when I'm eligible instead of annuitizing?
You probably don't need to annuitize it. After age 59.5, you can withdraw it via a Transfer Payout Annuity (the "ten years and a day" plan), or after 70.5 you can also take RMDs via what TIAA calls an MDO (Minimum Distribution Option). I say "probably" because with TIAA, many details can vary from one institution to another depending on the plan that they negotiate with TIAA.
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spdoublebass
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Re: TIAA questions

Post by spdoublebass » Thu Sep 13, 2018 6:12 pm

22twain wrote:
Thu Sep 13, 2018 5:48 pm
spdoublebass wrote:
Thu Sep 13, 2018 4:59 pm
In the ORP, I have access to the GRA version of Traditional with 4% guarnteed.
Are you sure that's the guaranteed minimum, rather than what it happens to be paying right now? I'd expect the guarantee to be something like 3.25% for a GRA or RA contract.
I know this is not liquid. My question is this version automatically an annuity? or can I take the 10 year payout when I'm eligible instead of annuitizing?
You probably don't need to annuitize it. After age 59.5, you can withdraw it via a Transfer Payout Annuity (the "ten years and a day" plan), or after 70.5 you can also take RMDs via what TIAA calls an MDO (Minimum Distribution Option). I say "probably" because with TIAA, many details can vary from one institution to another depending on the plan that they negotiate with TIAA.
You are right I think. Both are a guaranteed 3%. But GSRA is getting 3.25 and GRA around 4.

Thanks for the info. I may not want to annuities this money and that’s what I was concerned about.
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student
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Re: TIAA questions

Post by student » Thu Sep 13, 2018 7:04 pm

For the illiquid version, you can transfer out with 10 yearly payments.

The Wizard
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Re: TIAA questions

Post by The Wizard » Thu Sep 13, 2018 7:22 pm

You say that this is a small part of your assets and income.
Therefore keep some money in GRA Trad at 4%, annuitize it for lifetime monthly income in retirement, and pat yourself on the back for being so wise in your younger years.

Full disclosure: I'm 68 and have several thousand $$ per month of lifetime annuity income from TIAA, from a combination of Trad, TREA and CREF Stock...
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Re: TIAA questions

Post by The Wizard » Thu Sep 13, 2018 7:38 pm

Additionally, many of us with larger TIAA plans use Trad as a bond surrogate, since its value can't decrease, unlike a real bond fund.

But you can only use GSRA Trad to rebalance into stocks, obviously, not restricted GRA Trad.

Also need to consider your overall AA. Don't see your ages mentioned, but 60% stocks (or more) is good until within 5-10 years of retirement...
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spdoublebass
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Re: TIAA questions

Post by spdoublebass » Thu Sep 13, 2018 10:13 pm

The Wizard wrote:
Thu Sep 13, 2018 7:38 pm
Additionally, many of us with larger TIAA plans use Trad as a bond surrogate, since its value can't decrease, unlike a real bond fund.

But you can only use GSRA Trad to rebalance into stocks, obviously, not restricted GRA Trad.

Also need to consider your overall AA. Don't see your ages mentioned, but 60% stocks (or more) is good until within 5-10 years of retirement...

My age is mid 30’s. I’ve made previous posts about my IPS and AA. Using TRAD as a bond fund is what I like to do as well.

I’ve been reading up as much as I can regarding the GRA version. I think just splitting it with the GRSA version will be nice. This way I can rebalance with that portion.

I just wanted to make sure there were other options besides annuitizing it. Who knows maybe I will end up doing that, but I didn’t want it to be the only way.
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