TIAA Traditional: interesting article comparing to other fund investments

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CloseEnough
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TIAA Traditional: interesting article comparing to other fund investments

Post by CloseEnough »

This may have already been discussed, apologies if it has been. Some here who dive into the complexity of TIAA Traditional may want to digest this article. I have not, other than to draw from it, that I fall into the less sophisticated class of investors mentioned in the article, and will just stick with TIAA Trad.

https://content.csbs.utah.edu/~lozada/R ... TIAA_6.pdf
Harmanic
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by Harmanic »

Unless I missed it, it does not include the value of loyalty bonuses in annuitized accounts. It also does not reveal much new information and even states that their research is a guess, at best.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
LaramieWind
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by LaramieWind »

I found to many restrictions/rules/regulations for me to understand and follow. I prefer to be in control, not the other way around. We are about half way through our 10-year withdrawal out of TIAA.
crefwatch
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by crefwatch »

Lozada's online academic publications list:
https://faculty.utah.edu/u0030088-GABRI ... /index.hml

LaramieWind, your response to the TIAA Traditional product is reasonable, but it may not suit all possible customers. There is little dispute that TIAA probably offers the most favorable terms for lifetime annuitization-abbreviated on this newsboard as SPIA. When someone needs or wants that (and I acknowledge that not everyone knows this at the early stages of their career), it would be shame to value "control" over "my best financial interests."

This is not your parents' TIAA, but it still is more customer-centric than most other fin serv providers. Although she collected much more in total, from CREF Stock VA, my mother was very satisfied with her TIAA payout annuity products.

Disclosure: We do not need to annuitize our TIAA Traditional, but my wife and I have large holdings of it.
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oldzey
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by oldzey »

TIAA Traditional is an interesting financial product - I use it myself.

I keep an archive of information about TIAA Traditional (including Dr. Lozada's article), although I'm by no means an expert about how it actually works.

TIAA Traditional Annuity Archive:
https://www.dropbox.com/sh/y08d3qbmvisa ... QrZIa?dl=0
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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windaar
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by windaar »

I've used TIAA TRAD in place of a Bond Fund in my 403(b) for many years. It gives solid SWAN, only goes up, and saved me from the recent bond meltdown. I have come to terms with the fact that I do not understand all of its intricacies.
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student
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by student »

Thanks for the link....

I use TIAA Traditional for almost all my fixed income but I limit the illiquid version to about 30% of the TIAA traditional allocation. I think it behaves similar to Total Bond but smooth out the curve but long term return slightly below Total Bond. I like the fact that it is "stable" so it never goes down in value (assuming TIAA does not go bankrupt).
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windaar
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by windaar »

student wrote: Mon May 13, 2024 9:44 am(assuming TIAA does not go bankrupt).
From the article:
Traditional is backed by the claims-paying ability of TIAA, which is “one of only three insurance groups in the United States to currently hold the highest possible rating from three of the four leading insurance company rating agencies: A.M. Best, Fitch and Standard & Poor’s and the second highest possible rating from Moody’s Investors Service.”
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Harmanic
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by Harmanic »

windaar wrote: Mon May 13, 2024 9:58 am
student wrote: Mon May 13, 2024 9:44 am(assuming TIAA does not go bankrupt).
From the article:
Traditional is backed by the claims-paying ability of TIAA, which is “one of only three insurance groups in the United States to currently hold the highest possible rating from three of the four leading insurance company rating agencies: A.M. Best, Fitch and Standard & Poor’s and the second highest possible rating from Moody’s Investors Service.”
Let me add that in the case of pension fund bankruptcies, the beneficiaries still receive most of their pensions in most cases. In many cases, they get all the promised payments. So, even in a worst case scenario, it does not mean you get nothing, just less than what was promised.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
student
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by student »

windaar wrote: Mon May 13, 2024 9:58 am
student wrote: Mon May 13, 2024 9:44 am(assuming TIAA does not go bankrupt).
From the article:
Traditional is backed by the claims-paying ability of TIAA, which is “one of only three insurance groups in the United States to currently hold the highest possible rating from three of the four leading insurance company rating agencies: A.M. Best, Fitch and Standard & Poor’s and the second highest possible rating from Moody’s Investors Service.”
Yes. I remember that. I put the assumption there for completeness. If TIAA goes bankrupt, I think the country is in trouble. I vaguely recall reading somewhere that during the depression, TIAA almost did not make it but was "bailed" out by some organization "affiliated" with the Carnegie Foundation. (I am unable to find a reference at this time.)
adamthesmythe
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by adamthesmythe »

Hey! Gimme some of that second-degree stochastic dominance!!
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windaar
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by windaar »

adamthesmythe wrote: Mon May 13, 2024 11:11 am Hey! Gimme some of that second-degree stochastic dominance!!
I thought I had a good vocabulary but I had to look up "stochastic" when I looked at the abstract.
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obafgkm
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by obafgkm »

windaar wrote: Mon May 13, 2024 9:36 am I've used TIAA TRAD in place of a Bond Fund in my 403(b) for many years. It gives solid SWAN...
SWAN = Sleep Well at Night (I had to look it up)
"I'm investing in stocks... chicken, beef, and vegetable. It's risky, but I know one day it'll pay off & I'll be a bouillonaire. Who knows, I might even open up a Broth IRA."
Harmanic
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by Harmanic »

obafgkm wrote: Mon May 13, 2024 2:30 pm
windaar wrote: Mon May 13, 2024 9:36 am I've used TIAA TRAD in place of a Bond Fund in my 403(b) for many years. It gives solid SWAN...
SWAN = Sleep Well at Night (I had to look it up)
Not if it is a black swan.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
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oldzey
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Re: TIAA Traditional: interesting article comparing to other fund investments

Post by oldzey »

windaar wrote: Mon May 13, 2024 9:36 am I've used TIAA TRAD in place of a Bond Fund in my 403(b) for many years. It gives solid SWAN, only goes up, and saved me from the recent bond meltdown. I have come to terms with the fact that I do not understand all of its intricacies.
I do the same thing.

Here is a comparison of the two financial products (TRAD vs Total Bond):

https://collegeretirement.blogspot.com/ ... -deal.html
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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