I've been loving this communities feedback and thought I would reach out for some more. This is following up on a previous post.
From the advice I got there I was leaning towards going all in on a lifecycle index fund, but the mention of the TIAA Traditional annuities sent me down a bit of a rabbit hole. My understanding is that these are would be a good (potentially better?) replacement for the bond portion of my portfolio. The difference between Choice/Choice Plus seems to be a delayed vs fully liquid situation of which the delayed liquidity doesn't seem to bad and offers higher returns.
All that said it seems like in lieu of going with a lifecycle index fund I could potentially optimize just a little more by going with a combination of CREF Equity Index Account (R4)[QCEQFX] and TIAA-CREF International Equity Index Fund for my stock allocation and then use the TIAA TRAD for my fixed allocation. Is this a wise way to go about it or am I overcomplicating things?
Available funds are below:
TIAA Traditional Annuity - Retirement Choice [-] N/A
TIAA Traditional Annuity - Retirement Choice Plus[-] N/A
Vanguard Institutional Index Fund Institutional Plus[VIIIX] 0.02
CREF Equity Index Account (R4)[QCEQFX] 0.04
Vanguard Extended Market Index Fund Institutional[VIEIX] 0.05
TIAA-CREF International Equity Index Fund (Institutional)[TCIEX] 0.05
Vanguard Total Bond Market Index Fund Admiral[VBTLX] 0.05
CREF Inflation-Linked Bond Account (R4)[QCILFX] 0.05
CREF Social Choice Account (R4)[QSCCFX] 0.05
CREF Social Choice Account (R4)[QSCCFX] 0.07
Vanguard Treasury Money Market Fund Investor[VUSXX] 0.09
CREF Growth Account (R4)[QCGRFX] 0.09
Vanguard Health Care Index Fund Admiral Class Shares[VHCIX] 0.1
TIAA-CREF Lifecycle Index 2060 Fund (Institutional)[TVIIX] 0.1
TIAA-CREF Lifecycle Index 2055 Fund (Institutional)[TTIIX] 0.1
TIAA-CREF Lifecycle Index 2050 Fund (Institutional)[TLLIX] 0.1
TIAA-CREF Lifecycle Index 2045 Fund (Institutional)[TLXIX] 0.1
TIAA-CREF Lifecycle Index 2040 Fund (Institutional)[TLZIX] 0.1
TIAA-CREF Lifecycle Index 2035 Fund (Institutional)[TLYIX] 0.1
TIAA-CREF Lifecycle Index 2030 Fund (Institutional)[TLHIX] 0.1
TIAA-CREF Lifecycle Index 2025 Fund (Institutional)[TLQIX] 0.1
TIAA-CREF Lifecycle Index 2020 Fund (Institutional)[TLWIX] 0.1
TIAA-CREF Lifecycle Index 2015 Fund (Institutional)[TLFIX] 0.1
TIAA-CREF Lifecycle Index 2010 Fund (Institutional)[TLTIX] 0.1
CREF Core Bond Account (R4)[QCBMFX] 0.1
CREF Global Equities Account (R4)[QCGLFX] 0.1
TIAA-CREF Lifecycle Index 2065 Fund (Institutional)[TFITX] 0.1
CREF Stock Account (R4)[QCSTFX] 0.11
Vanguard Real Estate Index Fund Admiral[VGSLX] 0.12
Vanguard Equity Income Fund Admiral[VEIRX] 0.19
American Funds Growth Fund of America - R6[RGAGX] 0.3
PGIM Total Return Bond R6[PTRQX] 0.39
American Funds Capital World Growth and Income Fund - R6[RWIGX] 0.42
PIMCO RAE US Small Fund Institutional Class[PMJIX] 0.5
Victory Sycamore Established Value Fund R6[VEVRX] 0.54
American Funds New World R6[RNWGX] 0.57
Carillon Eagle Mid Cap Growth R6[HRAUX] 0.64
T Rowe Price Overseas Stock Fund Class I[TROIX] 0.67
TIAA Real Estate Account[QREARX] 0.77
ClearBridge Small Cap Growth Fund Class IS[LMOIX] 0.78
In my 403(b) I have 2 funds, TRAD and CREF Equity Index, invested and rebalanced according to my AA. Currently rebalancing into equities with new contributions. I have enough intl exposure in other legacy funds. I'm no expert but what you're proposing seems simple and sound.
As I learned most painfully in 2022, bond funds can decline in value, quite drastically. Given that my aim for fixed income asset allocation is to preserve the principal at the very least, if I were you, I would go with just the Equity Index fund and TIAA TRAD for fixed income even if the yields are slightly lower (but not substantially lower) than the bond funds.
lakpr wrote: ↑Fri May 26, 2023 12:21 am
As I learned most painfully in 2022, bond funds can decline in value, quite drastically. Given that my aim for fixed income asset allocation is to preserve the principal at the very least, if I were you, I would go with just the Equity Index fund and TIAA TRAD for fixed income even if the yields are slightly lower (but not substantially lower) than the bond funds.
I agree that the "gaurenteedness" of TRAD is appealing. As for the equity portion. Are you suggesting no international in this account at all because I should carry international elsewhere (taxable accounts)?
windaar wrote: ↑Thu May 25, 2023 7:08 pm
In my 403(b) I have 2 funds, TRAD and CREF Equity Index, invested and rebalanced according to my AA. Currently rebalancing into equities with new contributions. I have enough intl exposure in other legacy funds. I'm no expert but what you're proposing seems simple and sound.
Thanks for the reassurance. Which funds are you getting your intl exposure through?
lakpr wrote: ↑Fri May 26, 2023 12:21 am
As I learned most painfully in 2022, bond funds can decline in value, quite drastically. Given that my aim for fixed income asset allocation is to preserve the principal at the very least, if I were you, I would go with just the Equity Index fund and TIAA TRAD for fixed income even if the yields are slightly lower (but not substantially lower) than the bond funds.
I agree that the "gaurenteedness" of TRAD is appealing. As for the equity portion. Are you suggesting no international in this account at all because I should carry international elsewhere (taxable accounts)?
I am not an international equities fan. That is why I said "If I were you". If you definitely want to hold international equities in your portfolio, the fund in your 403(b) plan, TCIEX, is a good candidate. Can't get an international equities fund cheaper than 0.05% in an IRA
lakpr wrote: ↑Fri May 26, 2023 12:21 am
As I learned most painfully in 2022, bond funds can decline in value, quite drastically. Given that my aim for fixed income asset allocation is to preserve the principal at the very least, if I were you, I would go with just the Equity Index fund and TIAA TRAD for fixed income even if the yields are slightly lower (but not substantially lower) than the bond funds.
I agree that the "gaurenteedness" of TRAD is appealing. As for the equity portion. Are you suggesting no international in this account at all because I should carry international elsewhere (taxable accounts)?
I am not an international equities fan. That is why I said "If I were you". If you definitely want to hold international equities in your portfolio, the fund in your 403(b) plan, TCIEX, is a good candidate. Can't get an international equities fund cheaper than 0.05% in an IRA
Gotcha. Thank you for the input. Do you have any opinions on the retirement choice/choice plus versions of TRAD?
pineapplebot4000 wrote: ↑Fri May 26, 2023 1:45 pm
Gotcha. Thank you for the input. Do you have any opinions on the retirement choice/choice plus versions of TRAD?
I am not sure which is which -- but again, *if I were you*, I would go with the delayed return or annuity that would distribute the accumulated funds over a period of 10 years. This comes back to the purpose of WHY we are investing in fixed income in the first place. At least for me, the answer is that my investments, plus growth, would reliably see me through my retirement years, when I am not working, by choice or otherwise. I want that steady income to last me as long as possible.
pineapplebot4000 wrote: ↑Fri May 26, 2023 1:45 pm
Gotcha. Thank you for the input. Do you have any opinions on the retirement choice/choice plus versions of TRAD?
I am not sure which is which -- but again, *if I were you*, I would go with the delayed return or annuity that would distribute the accumulated funds over a period of 10 years. This comes back to the purpose of WHY we are investing in fixed income in the first place. At least for me, the answer is that my investments, plus growth, would reliably see me through my retirement years, when I am not working, by choice or otherwise. I want that steady income to last me as long as possible.
