How does TIAA-CREF work?

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clemrick
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How does TIAA-CREF work?

Post by clemrick » Sun May 26, 2019 12:05 pm

My husband has a 403(b) at TIAA-CREF with some money in the traditional annuity and some invested in their stock accounts and real estate. I understand how the traditional annuity works, but what about the stock accounts? When he retires can we move the money in the stock accounts to an IRA at Vanguard or is that money paid out as an annuity also?

TropikThunder
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Re: How does TIAA-CREF work?

Post by TropikThunder » Sun May 26, 2019 12:17 pm

clemrick wrote:
Sun May 26, 2019 12:05 pm
My husband has a 403(b) at TIAA-CREF with some money in the traditional annuity and some invested in their stock accounts and real estate. I understand how the traditional annuity works, but what about the stock accounts? When he retires can we move the money in the stock accounts to an IRA at Vanguard or is that money paid out as an annuity also?
You will have the choice to do either, or some of both. I don’t know if any other 401(k) or 403(b) custodian has a system to let you annuitize your holdings like TIAA does, but you can roll the funds out of TIAA just like you can for any other 401(k) or 403(b). [except for Traditional, but it seems you know the rules for that]

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cheese_breath
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Re: How does TIAA-CREF work?

Post by cheese_breath » Sun May 26, 2019 12:20 pm

It probably depends on his employer's requirements. I was able to roll my stock over into an IRA, but I had to have my employer sign an authorization form first.... BUT, this was about 20 years ago. Things might have changed since then. I'd start with having him ask his employer's HR.

Also, do you really understand how the traditional annuity works? Rather than annuitizing my TIAA Traditional for life I had it TPA'd into CREF stock and rolled that over too.
The surest way to know the future is when it becomes the past.

SGM
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Re: How does TIAA-CREF work?

Post by SGM » Sun May 26, 2019 5:38 pm

TIAA traditional can be annuitized and CREF can be annuitized at least for one long ago employer's plan. The CREF annuity is variable and payments have gone up considerably since annuitizing about 4 years ago. TIAA traditional has gone up each year since annuitizing, but by a smaller percentage. This was a plan that was started by a university in 1980. Contributions were only made for 4 years, but grew considerably in the 34 years until annuitization. An option was to transfer both or either into an IRA. We had a large amount in Roth accounts already so chose the annuity route. It was a good choice for us.

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clemrick
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Re: How does TIAA-CREF work?

Post by clemrick » Wed May 29, 2019 10:04 am

Thanks, everyone.

My husband will probably be retiring in the next five to ten years (65 to 70 years old) and I am figuring out where we want money to be when he does. I am currently moving his TIRA to Roth because it is looking like there will be significant amounts coming in monthly from Social Security, his pension, and the TIAA annuity.

aristotelian
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Re: How does TIAA-CREF work?

Post by aristotelian » Wed May 29, 2019 10:11 am

In addition to above info, it is probably worth your time to give TIAA a call and talk to someone there about your options. Among other things, they have different share classes of the same fund that have different expense ratios and options. It is all very confusing (possibly intentionally so).

You should understand that some classes of TIAA Traditional Annuity are illiquid and can only be withdrawn over a period of 9 years. If you do not want to stay in TIAA Traditional, you will want to begin those withdrawals now.

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cheese_breath
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Re: How does TIAA-CREF work?

Post by cheese_breath » Wed May 29, 2019 11:10 am

If you live near a TIAA local office you might want to schedule a visit and talk everything over in person. To see if they have a local office lear you...
  • Go to the TIAA Website TIAA.org
  • Scroll down the page until you see the yellow Contact Us on the left
  • See "Find a local office directly underneath
You'll need to make an appointment before you go.
The surest way to know the future is when it becomes the past.

Tdubs
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Re: How does TIAA-CREF work?

Post by Tdubs » Wed May 29, 2019 11:44 am

cheese_breath wrote:
Wed May 29, 2019 11:10 am
If you live near a TIAA local office you might want to schedule a visit and talk everything over in person. To see if they have a local office lear you...
  • Go to the TIAA Website TIAA.org
  • Scroll down the page until you see the yellow Contact Us on the left
  • See "Find a local office directly underneath
You'll need to make an appointment before you go.
Worth a visit, but go in realizing the sales pitch to come. They will give you a very impressive analysis of your holdings contracted from Morningstar. The TIAA rep will tell you that he/she is on salary and is giving completely independent advice. He will then pitch to you moving all your funds into TIAA/Nuveen funds at high ERs.

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cheese_breath
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Re: How does TIAA-CREF work?

Post by cheese_breath » Wed May 29, 2019 12:04 pm

Tdubs wrote:
Wed May 29, 2019 11:44 am
cheese_breath wrote:
Wed May 29, 2019 11:10 am
If you live near a TIAA local office you might want to schedule a visit and talk everything over in person. To see if they have a local office lear you...
  • Go to the TIAA Website TIAA.org
  • Scroll down the page until you see the yellow Contact Us on the left
  • See "Find a local office directly underneath
You'll need to make an appointment before you go.
Worth a visit, but go in realizing the sales pitch to come. They will give you a very impressive analysis of your holdings contracted from Morningstar. The TIAA rep will tell you that he/she is on salary and is giving completely independent advice. He will then pitch to you moving all your funds into TIAA/Nuveen funds at high ERs.
Yeah, I'd forgotten about the 'wealth managers'. I visited long ago before WM days and found it quite helpful then.
The surest way to know the future is when it becomes the past.

bikechuck
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Re: How does TIAA-CREF work?

Post by bikechuck » Wed May 29, 2019 6:36 pm

Tdubs wrote:
Wed May 29, 2019 11:44 am
cheese_breath wrote:
Wed May 29, 2019 11:10 am
If you live near a TIAA local office you might want to schedule a visit and talk everything over in person. To see if they have a local office lear you...
  • Go to the TIAA Website TIAA.org
  • Scroll down the page until you see the yellow Contact Us on the left
  • See "Find a local office directly underneath
You'll need to make an appointment before you go.
Worth a visit, but go in realizing the sales pitch to come. They will give you a very impressive analysis of your holdings contracted from Morningstar. The TIAA rep will tell you that he/she is on salary and is giving completely independent advice. He will then pitch to you moving all your funds into TIAA/Nuveen funds at high ERs.

Your prediction is inconsistent with my experience. I meet annually with my TIAA wealth advisor for a sanity check on how we are managing our portfolio. He has made several helpful suggestions and has never once suggested that we move the 70% of our portfolio invested with others to TIAA.

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willthrill81
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Re: How does TIAA-CREF work?

Post by willthrill81 » Wed May 29, 2019 6:54 pm

cheese_breath wrote:
Sun May 26, 2019 12:20 pm
It probably depends on his employer's requirements. I was able to roll my stock over into an IRA, but I had to have my employer sign an authorization form first.... BUT, this was about 20 years ago. Things might have changed since then. I'd start with having him ask his employer's HR.
+1

One of my prior employers prohibited employees, including former employees, from rolling over their 401a plan to another custodian until age 59.5. Thankfully, they eliminated that requirement last year, and I immediately rolled it over to Vanguard.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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willthrill81
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Re: How does TIAA-CREF work?

Post by willthrill81 » Wed May 29, 2019 6:56 pm

clemrick wrote:
Sun May 26, 2019 12:05 pm
My husband has a 403(b) at TIAA-CREF with some money in the traditional annuity and some invested in their stock accounts and real estate. I understand how the traditional annuity works, but what about the stock accounts? When he retires can we move the money in the stock accounts to an IRA at Vanguard or is that money paid out as an annuity also?
Basically, TIAA's (the 'CREF' no longer applies) stock annuity contracts operate like a mutual fund. However, you should pay close attention to the expense ratios of the funds; some are quite high.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Tdubs
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Re: How does TIAA-CREF work?

Post by Tdubs » Wed May 29, 2019 6:59 pm

bikechuck wrote:
Wed May 29, 2019 6:36 pm
Tdubs wrote:
Wed May 29, 2019 11:44 am
cheese_breath wrote:
Wed May 29, 2019 11:10 am
If you live near a TIAA local office you might want to schedule a visit and talk everything over in person. To see if they have a local office lear you...
  • Go to the TIAA Website TIAA.org
  • Scroll down the page until you see the yellow Contact Us on the left
  • See "Find a local office directly underneath
You'll need to make an appointment before you go.
Worth a visit, but go in realizing the sales pitch to come. They will give you a very impressive analysis of your holdings contracted from Morningstar. The TIAA rep will tell you that he/she is on salary and is giving completely independent advice. He will then pitch to you moving all your funds into TIAA/Nuveen funds at high ERs.

Your prediction is inconsistent with my experience. I meet annually with my TIAA wealth advisor for a sanity check on how we are managing our portfolio. He has made several helpful suggestions and has never once suggested that we move the 70% of our portfolio invested with others to TIAA.
That's nice, but it isn't what mine did. You might just be one of the lucky ones. Check this thread.

viewtopic.php?t=264939

Northster
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Re: How does TIAA-CREF work?

Post by Northster » Wed May 29, 2019 7:10 pm

I have TIAA traditional and have chosen an option I don't often see discussed -- taking an RMD. I did a spreadsheet comparing the annuity vs RMD and found that while the annuity gave greater returns in early years, when I looked at income received+assets remaining, the RMD seemed more favorable. Of course there is a difference between the actuarial-based RMD and a true guaranteed income, and I don't need the guaranteed income. But an option to consider.

22twain
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Re: How does TIAA-CREF work?

Post by 22twain » Thu May 30, 2019 8:51 am

Northster wrote:
Wed May 29, 2019 7:10 pm
I have TIAA traditional and have chosen an option I don't often see discussed -- taking an RMD.
That's what we're doing also.
I don't need the guaranteed income.
Nor do we, at least not yet. DW starts SS and RMDs this year, and I will follow in a few years. We haven't needed to spend down much of our nest egg in the meantime, so we didn't consider starting earlier. After we're both collecting SS, it will more than cover our current expenses, plus the taxes on the RMDs and the SS itself.

If/when our expenses increase significantly, because of e.g. medical issues or moving to a CCRC (we have no children or other close relatives), then we will consider annuitizing some of our TIAA traditional and stock accumulation.
My investing princiPLEs do not include absolutely preserving princiPAL.

fposte
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Re: How does TIAA-CREF work?

Post by fposte » Thu May 30, 2019 9:16 am

22twain wrote:
Thu May 30, 2019 8:51 am
Northster wrote:
Wed May 29, 2019 7:10 pm
I have TIAA traditional and have chosen an option I don't often see discussed -- taking an RMD.

...If/when our expenses increase significantly, because of e.g. medical issues or moving to a CCRC (we have no children or other close relatives), then we will consider annuitizing some of our TIAA traditional and stock accumulation.
Yes, that's my plan as well. I'm in a GSRA so there's some comparative flexibility, and RMDs with the possibility of a plan change if needed look like the best approach.

bikechuck
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Re: How does TIAA-CREF work?

Post by bikechuck » Thu May 30, 2019 11:45 am

Another withdrawal option for TIAA Traditional is "interest only". I plan to do that when I am 67 until I am subject to RMDs, once RMDs kick in I will consider switching to RMDs or possibly annuitizing depending on how my overall portfolio is holding up.

mariezzz
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Re: How does TIAA-CREF work?

Post by mariezzz » Thu May 30, 2019 3:20 pm

Some TIAA-CREF plans offer Vanguard options. You could ask the employer to consider adding them - they ERs (about .04%)are far lower than the CREF options TIAA has. You'll be doing everyone at the employer a favor if they do add a few lower fee options. If the options your employer has improve, you could consider leaving the funds at TIAA - depending on your state laws, those funds may be better protected against creditors in a 403b, compared to an IRA.

As a note: TIAA is slow to move money out of their accounts to another company. Well in advance, talk to TIAA about precisely which forms you need to fill out to initiate the move. In the meantime, you can create an account at Vanguard (or wherever) if you don't already have one.

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