Moving Roth IRA from TIAA to Vanguard

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blackburnian
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Joined: Thu May 04, 2017 12:40 pm

Moving Roth IRA from TIAA to Vanguard

Post by blackburnian »

I have had a Roth IRA at TIAA for many years. Now I have a Vanguard account and I wonder if I should move the IRA to Vanguard
because TIAA has higher expense ratios. The funds are invested in equity index (31%), small cap index (29%), international index (21%), bond index (9%), TIAA real estate (3%), and TIAA traditional (7%) (which is paying 3%). Expense ratios are around 0.3 (0.8 for real estate). Total value is about $140,000, and I'll be contributing for two more years. Thoughts? If I do switch, how would I go about doing it?
Thanks!
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Brianmcg321
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Re: Moving Roth IRA from TIAA to Vanguard

Post by Brianmcg321 »

Call Vanguard. They can do it over the phone with TIAA. Easy peasy.
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Topic Author
blackburnian
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Re: Moving Roth IRA from TIAA to Vanguard

Post by blackburnian »

Thank you Brianmcg321!
livesoft
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Re: Moving Roth IRA from TIAA to Vanguard

Post by livesoft »

Vanguard will not be able to accept the TIAA Traditional Annuity paying 3% nor the TIAA Real Estate Account. You will need to decide if these are investments that you want to keep and if you want to keep adding to them.
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crefwatch
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Re: Moving Roth IRA from TIAA to Vanguard

Post by crefwatch »

I agree that the asset allocation you describe can be achieved more cheaply and more service satisfaction, with Vanguard than with a TIAA Roth IRA. I happen to personally like TIAA Traditional at 3% during an extended period of low interest rates, but your tiny allocation indicates that it will be no loss to you.

Note that the comment about "over the phone" refers to your own actions, not TIAA's. All fin serv companies drag their feet about transferring assets. So you should not expect instant results from your phone call to Vanguard.
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blackburnian
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Re: Moving Roth IRA from TIAA to Vanguard

Post by blackburnian »

Thanks for additional advice. I do have a lot of TIAA traditional already (in my retirement accounts), thanks to Bogleheads recommendations from a few years ago, so it's probably worth sacrificing the small amount I have in the Roth. I'll be sorry to see it go.
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dodecahedron
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Re: Moving Roth IRA from TIAA to Vanguard

Post by dodecahedron »

crefwatch wrote: Fri Sep 18, 2020 11:00 am Note that the comment about "over the phone" refers to your own actions, not TIAA's. All fin serv companies drag their feet about transferring assets. So you should not expect instant results from your phone call to Vanguard.
Definitely do not expect instant results. I initiated a transfer of a Roth IRA from TIAA to Schwab a couple years ago. I was pleasantly surprised it only took two weeks. Here is my timeline.

Tuesday Dec 4, 2018 Opened Roth IRA at Schwab (where I already had a longstanding taxable account) and requested that it be funded by trustee-to-trustee transfer from TIAA.

Monday Dec 10, 2018 Received an email from Schwab that TIAA would not release the funds unless I contacted TIAA directly. I called TIAA and they sent me the form I needed to fill out and return to TIAA, which I did. It appears they wanted a wet ink signature, so I mailed it to them.

Thurs Dec 13, 2018 TIAA notified me that they had completed the transaction on their end and sent the funds on their way.

Tuesday Dec 18, 2018 Schwab notified me that they had received the funds and posted them to my account. (It looks like TIAA mailed Schwab a physical check.)

Since the mail is slower these days, it might take you longer. You will likely be out of the market for some period of time while the funds are in transit.
Last edited by dodecahedron on Fri Sep 18, 2020 2:42 pm, edited 1 time in total.
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dodecahedron
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Re: Moving Roth IRA from TIAA to Vanguard

Post by dodecahedron »

crefwatch wrote: Fri Sep 18, 2020 11:00 am I agree that the asset allocation you describe can be achieved more cheaply and more service satisfaction, with Vanguard than with a TIAA Roth IRA. I happen to personally like TIAA Traditional at 3% during an extended period of low interest rates, but your tiny allocation indicates that it will be no loss to you.
Indeed, plus unless the OP's funds in the Roth IRA went into Trad prior to Oct 2010, they are only yielding 1% rather than 3%, though the OP did state the account has been open for "many years" so perhaps they are still paying 3%.
JohnDoh
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Re: Moving Roth IRA from TIAA to Vanguard

Post by JohnDoh »

blackburnian wrote: Fri Sep 18, 2020 9:46 am I have had a Roth IRA at TIAA for many years. Now I have a Vanguard account and I wonder if I should move the IRA to Vanguard
because TIAA has higher expense ratios. The funds are invested in equity index (31%), small cap index (29%), international index (21%), bond index (9%), TIAA real estate (3%), and TIAA traditional (7%) (which is paying 3%). Expense ratios are around 0.3 (0.8 for real estate). Total value is about $140,000, and I'll be contributing for two more years. Thoughts? If I do switch, how would I go about doing it?
Thanks!
I think there are a number of considerations to be considered :happy :

1) The two unique TIAA investments -- traditional (TRAD) and real estate (TREA) -- are valuable and shouldn't be given up lightly IMO, especially if you are getting 3% on your old TRAD balance (which I would keep FOREVER! ... or until interest rates rise substantially above 3%). It remains to be seen whether TREA is a thing of the past or not, but I am not counting it out at this point. If/when TREA comes back to life -- and assuming TIAA's rules continue to permit effective market timing of TREA -- it will again be extremely valuable because it can reliably earn more than TRAD. Many folks held TREA in lieu of TRAD over recent years and then sold into stocks during March/April and have now made $$$.

2) If you have employer accounts and/or traditional IRA at TIAA, having ROTH at TIAA will facilitate future Roth conversions should you be so minded and have the opportunity.

3) You can always open a (free) "brokerage window" in your TIAA ROTH and have access to the entire world of low-cost investments (ETFs, etc.)

I would not use or recommend TIAA for a taxable account, so I've ended up consolidating into 3 investment accounts:
a) TIAA (including ROTH brokerage) for retirement accounts (consolidated from other places over time)
b) Fidelity for taxable and HSA
c) TreasuryDirect for savings bonds.

Works pretty well IMO, though of course YMMMV.
InMyDreams
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Re: Moving Roth IRA from TIAA to Vanguard

Post by InMyDreams »

dodecahedron wrote: Fri Sep 18, 2020 2:30 pm
Monday Dec 10, 2018 Received an email from Schwab that TIAA would not release the funds unless I contacted TIAA directly. I called TIAA and they sent me the form I needed to fill out and return to TIAA, which I did. It appears they wanted a wet ink signature, so I mailed it to them.
This. I moved funds about 4 years ago from TIAA to VG. As I recall, VG had me fill out their forms, but TIAA wouldn't accept them, and I had to fill out TIAA's form.

I still have a TIAA pension account and a 403b. But I have access to very good (Vanguard Institutional) funds in those accounts that were not accessible to me in my TIAA Roth.
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