Thoughts on my TIAA traditional options

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Deighve
Posts: 21
Joined: Sat Nov 18, 2017 10:30 am

Thoughts on my TIAA traditional options

Post by Deighve » Thu Jun 14, 2018 7:22 am

I have the option of TIAA traditional in my account. I am thinking of replacing a portion of my fixed income with it. Maybe 30% of FI. I am currently holding 80% equities and 20% FI. Do any of these choices stand out? For the third option you do not have to hold for any period of time, so it could be used for rebalancing.

TIAA Fixed Annuity / TIAA Traditional Annuity Options

1) current rate 3.25 minimum guaranteed 3.00 (must hold 7 years)

2)current rate 4.25 minimum guaranteed 1.00 (must hold 7 years)

3)current rate 3.5 minimum guaranteed 1.15 (do not have to hold for any period of time)

The Wizard
Posts: 12266
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Thoughts on my TIAA traditional options

Post by The Wizard » Thu Jun 14, 2018 7:46 am

Yes, Trad is a good choice for a bond surrogate nowadays.
You could keep half your Trad in the higher rate illiquid version and half in the lower rate liquid version, which is roughly what I do.
The higher rate Trad can be targeted for eventual annuitization.
I also keep a smaller amount in their junk bond fund, TIHYX...
Attempted new signature...

student
Posts: 2530
Joined: Fri Apr 03, 2015 6:58 am

Re: Thoughts on my TIAA traditional options

Post by student » Thu Jun 14, 2018 8:16 am

Just a data point, I use TIAA Traditional almost exclusively as fixed income. It is interesting that you have a version with 3% minimum rate and only a 7-year holding period. I am aware of 3% min and 10-year (9 years and a month) holding period.

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