TIAA financial advisor?

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mrc
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Re: TIAA financial advisor?

Postby mrc » Tue Apr 18, 2017 1:05 pm

Naismith wrote:Okay, following up on our meeting with the Wealth Advisor.


Thanks so much for the feedback.

Some say TEA-uh I say T.I.A.A Cref. Old habits are hard to break ... :-)

We have talked with other advisors about our retirement and all get quiet about taxes. Next to AA and ER, taxes matter as much as anything -- and maybe more. That is why I value this site so much. Very nice to be able to set a course you can trust, compare what you hear from the experts, and fill in the blanks as you plan this complex endeavor.
A great challenge of life: Knowing enough to think you're doing it right, but not enough to know you're doing it wrong. — Neil deGrasse Tyson

ciliegia
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Re: TIAA financial advisor?

Postby ciliegia » Thu May 18, 2017 9:14 pm

My plan is to retire in two years. So, on Tuesday I met with my WMA (that's what it says on the e-mail) from TIAA. This was our first meeting so it was more informational and fact gathering for both of us. We will meet again in a month. I am confused, however. Thirty years ago, my husband retired and received and still receives his pension from TIAA-CREF. At that time, the investor received all funds, nothing was left out.

Now, based on my conversation with the WMA, he states that annuitizing the entire amount would not be to my advantage.
First, my investments are pre-tax and that means that once I start receiving my pension, I will have to pay taxes. He suggests that I use more of my savings than the pension fund.
Second, by keeping money in my accounts and not taking all the pension benefits, I can use the money for (ie) long term medical insurance. I know that insurance companies do not pay out total expenditures for long term health insurance. I asked and was told by them that they may pay $1000-1500 a month. Not enough for anything. As I am taking care of my husband who has Alzheimer's, I understand what this gentleman is suggesting, but on the other hand, if that were to happen to me, I wouldn't know if I were in a good or bad place...if I were paying or Medicaid were paying...
Third, he kept telling me that I don't have to start collecting my pension until I'm 70.5 years old at which point the gov't, basically, mandates that I have to take, at least, 3%.
Over the years I have saved, either through bank accts, mutual funds, and CD's, a considerable amount of money. The State in which I live (MA) does not collect social security for any state employee and I work for the state. Even though I arrived at the maximum amount of SS 20 years ago, the fact that I haven't (and wasn't allowed by State law) invested in SS means that when I start collecting it, it will be in the range of $700 @ month.

When I retire, I do not plan to leave any retirement funds to anyone. I do believe that there will be some funds for relatives, but from my personal accts.

Those of you who retired recently (or are about to retire), suggestions? As I told the WMA, I don't want to live my retirement life nickle and diming everything. I want to enjoy it...travel...stay abroad for awhile.

student
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Re: TIAA financial advisor?

Postby student » Thu May 18, 2017 10:24 pm

ciliegia wrote:Now, based on my conversation with the WMA, he states that annuitizing the entire amount would not be to my advantage.
First, my investments are pre-tax and that means that once I start receiving my pension, I will have to pay taxes. He suggests that I use more of my savings than the pension fund.


It is my understanding that this this correct.

ciliegia wrote:Second, by keeping money in my accounts and not taking all the pension benefits, I can use the money for (ie) long term medical insurance. I know that insurance companies do not pay out total expenditures for long term health insurance. I asked and was told by them that they may pay $1000-1500 a month. Not enough for anything. As I am taking care of my husband who has Alzheimer's, I understand what this gentleman is suggesting, but on the other hand, if that were to happen to me, I wouldn't know if I were in a good or bad place...if I were paying or Medicaid were paying...


I am not knowledgeable enough to answer this.

ciliegia wrote:Third, he kept telling me that I don't have to start collecting my pension until I'm 70.5 years old at which point the gov't, basically, mandates that I have to take, at least, 3%.


This is correct. The later you take distribution the better as you delay paying taxes on the money. Obviously the government wants you to pay taxes so you must start taking money out at 70 1/2. I am not sure about the actual figure. I think it is complicated. See https://personal.vanguard.com/us/insigh ... r-rmd-tool for an estimate..

ciliegia
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Joined: Thu May 18, 2017 8:39 pm

Re: TIAA financial advisor?

Postby ciliegia » Thu May 18, 2017 11:12 pm

One other thing: when I asked him for a ball park figure of how much I should leave within my account while taking my pension, his response was "roughly 40%".
At present, I have over $700000 in my TIAA-CREF accounts. I am 65 and will retire, as stated, within 2 years. Why should I leave so much within the retirement account? What would be a better percentage?

InMyDreams
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Re: TIAA financial advisor?

Postby InMyDreams » Fri May 19, 2017 12:50 am

I had two meetings with a WMA last year. I've been perplexed about handling $$ at three different companies in different types of plans, and trying to figure out whether I really have enough to retire (early? 65? 66?).
First meeting was good, and there were assurances that the WMA was not commission-based, my choices were no-never-mind to him.
Second meeting left me confused. I really didn't have an answer to my initial questions, but the plan/WMA seemed to assume that I was signing up for an AUM account, with fees. How did I go from a salaried WMA to paying an AUM fee? There was no mention of rolling $$ into IRAs, however.

After I left, and paged thru the document I'd been given, I found that a TIAA fund "overlay" had been specified (not by me!). And I thought about what my father is paying his Vanguard advisor to manage his funds - for more funds under management, he pays less fees than I would have paid to TIAA.

So I went to a fee-only CFP and got the answers I was looking for.

From what I've read on the net - WMA's talents vary widely. Keep your eyes open.

I have now changed my WMA - so I can get information about investment vehicles & annuities, not a "plan". It's a positive change so far.

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

Re: TIAA financial advisor?

Postby student » Fri May 19, 2017 6:10 am

ciliegia wrote:One other thing: when I asked him for a ball park figure of how much I should leave within my account while taking my pension, his response was "roughly 40%".
At present, I have over $700000 in my TIAA-CREF accounts. I am 65 and will retire, as stated, within 2 years. Why should I leave so much within the retirement account? What would be a better percentage?


Since you keep using the term "pension" even though that it is not, I assume that you want it to behave like a pension, that is, you want a guaranteed income stream for you and your husband ONLY. Therefore you want to convert it to lifetime retirement income. I assume that you have seen something like https://www.tiaa.org/public/pdf/pubs/pd ... income.pdf

To get the highest possible amount per month, you choose no guaranteed period. But this means if you pass away, then the income stops and there is nothing for your spouse. This is a one-life annuity which guarantees you income for as long as you live.

Alternatively, you can choose two-life annuity which guarantees lifetime income to you or, upon your death, income that will continue to your annuity partner/husband for his life. Again, after you both pass away, the income stops. So it behaves just like a pension. Of course, the monthly income in this option is less than the above option.

If you are worry that both of you pass away prematurely and you want to leave money to someone, then you can pick a guarantee period, that is, it will pay at least X years. Your choice. Of course, the monthly income in this option is less than the above two options.

You can go to TIAA website to get an estimate of you monthly income based on your choice of the options I mentioned above..

Edit: However, there is no COLA for lifetime retirement income but there is an option that may be similar to it.

ciliegia
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Re: TIAA financial advisor?

Postby ciliegia » Fri May 19, 2017 12:14 pm

I'm aware of the fact that I will not be leaving anything to my spouse. When he retired 30 years ago, he did the same thing...at that time, we discussed it and decided that it was best to take it all...especially since we knew that I had these accounts. My husband is 91 and he's been collecting TIAA/CREF for 30 years now. Nothing will come to me when he passes away...just as planned.

Of course I consider it a pension fund...when I joined (roughly 30 years ago), that's what they called it and that's the way I always have looked at it.

bikechuck
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Re: TIAA financial advisor?

Postby bikechuck » Fri May 19, 2017 1:35 pm

I have some funds with TIAA from before my employer changed providers for our retirement program. Approximately three years ago in preparation for retirement (this July) I met with my TIAA advisor for the first time. It was well worth my time and he had several suggestions that I have implemented or will implement shortly after I retire. He put no pressure whatsoever on my wife or me to move funds from other providers to TIAA.

He educated me about an opportunity to take advantage of NUA rules for stock that I have in a retirement account with a previous employer. I am going to take advantage of that opportunity in 2018 when I am in a lower tax bracket, it was good advice that will save me money.

He noticed that I had a very small IRA with an insurance co that I opened over 20 years ago and have paid little attention to since. This account is paying 4.5% per year and he suggested that I refresh my memory about it and consider adding more money to it if I was able to do so. Turns out it is paying a guaranteed MINIMUM 4.5% per year and I can add money to it so I have been doing so as a bond substitute. The new money that I am adding also earns a guaranteed minimum of 4.5% and there is no waiting period or penalty for withdrawing new funds that I have recently added to that account if I need to do so. I am VERY HAPPY that he suggested that I refresh my memory about this investment.

He noticed that I have an after tax 401K with my current employer and he pointed out that I can convert that to a Roth and I have done so.

He helped my wife begin contributing to a back door Roth.

He is a good listener and it is helpful to have a knowledgeable person to talk things over with that can help you from harming yourself with a bad idea.

Bottom line I am very happy that I visited with him and I plan to continue doing so on a periodic basis going forward.

student
Posts: 663
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA financial advisor?

Postby student » Fri May 19, 2017 4:06 pm

ciliegia wrote:I'm aware of the fact that I will not be leaving anything to my spouse. When he retired 30 years ago, he did the same thing...at that time, we discussed it and decided that it was best to take it all...especially since we knew that I had these accounts. My husband is 91 and he's been collecting TIAA/CREF for 30 years now. Nothing will come to me when he passes away...just as planned.

Of course I consider it a pension fund...when I joined (roughly 30 years ago), that's what they called it and that's the way I always have looked at it.


Then it would seem that the answer is simple. You take one-life annuity. With the standard payment method, you get what you call a pension. It will be with no COLA. With the graded payment method, you get something similar to a pension with a feature similar to COLA.


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