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Rolling Over 403(b) Retirement Funds From Tiaa-cref


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#1 corkmeister

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Posted 04 February 2008 - 05:00 PM

I have a client who is about to retire from a large western university. Per the recommendation of the university and TIAA financial advisers, he has contributed together with the school a substantial sum into the TIAA fixed annuity over several decades. When he first signed on with TIAA he was advised that he must also simultaneously open an account with CREF which is the mutual fund investment side. Although he has questioned the financial advisors (there have been a minimum of 3-4 so far) over the years about whether it would be wiser to invest part of his monthly contributions in the CREF side as well as the TIAA side, he was always adivsed to contribute only to and leave everything in the TIAA side. Over the decades, TIAA has averaged an annual return of only 4-5%/year because it was invested soley in fixed income investments. Now that he is ready to retire, he is being told by TIAA that he cannot have his money. He must leave it with TIAA, but his choices for payout are:
1. A 6%/year payout over his lifetime or 4.7% payout over 2 lives.
2. A 10, 15 or 20 year guaranteed payout for 2 lives that would generate a maximum payout equal to only
1/3 of his account over 10 years, approximately 1/2 of his account paid out over 15 or 2/3 paid out over 20 years.
3. Or they will pay out 10% of his total account to him over the next 10 years, but the remainder stays in TIAA with no possibility of a surrender under any circumstances. Loans are not allowed nor a rollover into CREF so that it could be in mutual funds during the 10 year payout. He is stuck with a 4-5% return on his money even after retirement.

Anybody have any idea how to rollover all the account into anything that would be more productive and liquid than TIAA?

#2 Guest_Skeptical_*

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Posted 04 February 2008 - 06:19 PM

Corkmeister,

With all due respect, did you cash their check for advisory services and THEN tell your client that you had no idea how to solve this problem (if there is a solution), or are you just hoping to sell them something? What would they think if they knew you were soliciting advice from a public board? Couldn't your client just come here and do the same for free? What value are you providing to them? Why would anyone on this board provide a "free" answer to you? This is why most of us here believe that "financial advisors" have little credibility.

Skeptical

p.s. Not withstanding my previous remarks, there are fee-only investment advisors who provide substantial un-biased value.

#3 intruder

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Posted 04 February 2008 - 07:53 PM

QUOTE(corkmeister @ Feb 4 2008, 05:00 PM) View Post

I have a client who is about to retire from a large western university. Per the recommendation of the university and TIAA financial advisers, he has contributed together with the school a substantial sum into the TIAA fixed annuity over several decades. When he first signed on with TIAA he was advised that he must also simultaneously open an account with CREF which is the mutual fund investment side. Although he has questioned the financial advisors (there have been a minimum of 3-4 so far) over the years about whether it would be wiser to invest part of his monthly contributions in the CREF side as well as the TIAA side, he was always adivsed to contribute only to and leave everything in the TIAA side. Over the decades, TIAA has averaged an annual return of only 4-5%/year because it was invested soley in fixed income investments. Now that he is ready to retire, he is being told by TIAA that he cannot have his money. He must leave it with TIAA, but his choices for payout are:
1. A 6%/year payout over his lifetime or 4.7% payout over 2 lives.
2. A 10, 15 or 20 year guaranteed payout for 2 lives that would generate a maximum payout equal to only
1/3 of his account over 10 years, approximately 1/2 of his account paid out over 15 or 2/3 paid out over 20 years.
3. Or they will pay out 10% of his total account to him over the next 10 years, but the remainder stays in TIAA with no possibility of a surrender under any circumstances. Loans are not allowed nor a rollover into CREF so that it could be in mutual funds during the 10 year payout. He is stuck with a 4-5% return on his money even after retirement.

Anybody have any idea how to rollover all the account into anything that would be more productive and liquid than TIAA?


corkmesiter:

Apologies for the boorish poster who responded to you. What you are unaware of is that even though this site is supposed to be the place to post questions on 403b annuity plans most of posters are disgruntled public school teachers who are antagonsitic to any poster who they believe is a salesman who lives off the hard earned wages of employees who contribute to 403b salary reduction plans by receiving either commissions or advisory fees. ( You use of "client" indicates to me that you could be an attorney, accountant or financial planner.) Hence the vituperative response from the prior poster who let loose his invective at you because it is his substitute for a lack of understading of how 403b plans for university employees operate. (If you peruse these boards you will see similar reponses from him and others with a lack of knowledge of the regulatory and tax aspects of 403b plans who have no shortage of opinions.) My suggestion to you is if you wish to receive an intelligent response to your question you should go to benefitslink.com and find the message board and look for the heading retirement plans where there is a separate board to post questions on 403b plans. The posters on that board are professionals who will not insult you for asking an intelligent question nor impune your integrity.

#4 Guest_Skeptical_*

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Posted 04 February 2008 - 08:06 PM

QUOTE(intruder @ Feb 4 2008, 06:53 PM) View Post

.....( You use of "client" indicates to me that you could be an attorney, accountant or financial planner.)



Cork:

Exactly. Let us know if we're wrong. Perhaps our dear friend Intruder will join you at benefitslink and save us all a bit of heartache. Notice he/she didn't answer your question. Hmmm. Maybe he will on the other site.

By the way, where do I get that license to be a "financial planner" again? Oh that's right, there isn't one. Silly me.

Jim

p.s Nice try though.



#5 intruder

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Posted 04 February 2008 - 08:19 PM

QUOTE(Skeptical @ Feb 4 2008, 08:06 PM) View Post

QUOTE(intruder @ Feb 4 2008, 06:53 PM) View Post

.....( You use of "client" indicates to me that you could be an attorney, accountant or financial planner.)



Cork:

Exactly. Let us know if we're wrong. Perhaps our dear friend Intruder will join you at benefitslink and save us all a bit of heartache. Notice he/she didn't answer your question. Hmmm. Maybe he will on the other site.

By the way, where do I get that license to be a "financial planner" again? Oh that's right, there isn't one. Silly me.

Jim

p.s Nice try though.



Why would cork want to prove his worthiness to have public school teachers give him adivce on a complex regulatory/tax matter involving a university 403b plan?

#6 Guest_Sierra_*

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Posted 05 February 2008 - 01:37 PM

QUOTE(corkmeister @ Feb 4 2008, 05:00 PM) View Post

I have a client who is about to retire from a large western university. Per the recommendation of the university and TIAA financial advisers, he has contributed together with the school a substantial sum into the TIAA fixed annuity over several decades. When he first signed on with TIAA he was advised that he must also simultaneously open an account with CREF which is the mutual fund investment side. Although he has questioned the financial advisors (there have been a minimum of 3-4 so far) over the years about whether it would be wiser to invest part of his monthly contributions in the CREF side as well as the TIAA side, he was always adivsed to contribute only to and leave everything in the TIAA side. Over the decades, TIAA has averaged an annual return of only 4-5%/year because it was invested soley in fixed income investments. Now that he is ready to retire, he is being told by TIAA that he cannot have his money. He must leave it with TIAA, but his choices for payout are:
1. A 6%/year payout over his lifetime or 4.7% payout over 2 lives.
2. A 10, 15 or 20 year guaranteed payout for 2 lives that would generate a maximum payout equal to only
1/3 of his account over 10 years, approximately 1/2 of his account paid out over 15 or 2/3 paid out over 20 years.
3. Or they will pay out 10% of his total account to him over the next 10 years, but the remainder stays in TIAA with no possibility of a surrender under any circumstances. Loans are not allowed nor a rollover into CREF so that it could be in mutual funds during the 10 year payout. He is stuck with a 4-5% return on his money even after retirement.

Anybody have any idea how to rollover all the account into anything that would be more productive and liquid than TIAA?


Your client needs to get a copy of the rules and regs of the retirement Plan (Plan Document) as adopted by the University. It is the Plan Document that governs.

Joel L. Frank

#7 apteacher

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Posted 05 February 2008 - 02:37 PM

Intruder,

Your contempt for teachers is remarkable. Poor dears, they just don't understand something as simple and clear as IRS regulations.

If you have teachers as clients, it must really pain you to hold back that contempt. Presumably, you have no such pain when they pay your fees.

Oh, and one other thing. You wrote that, "... this site is supposed to be the place to post questions on 403b annuity plans ..."

Uh, Intruder, I don't think this site is supposed to be for questions on 403b ANNUITY plans. You see, there are OTHER plans that don't require that teachers invest in those high-fee annuity products. We can actually invest in no load mutual funds, too. Imagine that.

And this from someone who is critical for teachers not being up to snuff on complex IRS regulations!

#8 intruder

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Posted 05 February 2008 - 08:44 PM

QUOTE(apteacher @ Feb 5 2008, 02:37 PM) View Post

Intruder,

Your contempt for teachers is remarkable. Poor dears, they just don't understand something as simple and clear as IRS regulations.

If you have teachers as clients, it must really pain you to hold back that contempt. Presumably, you have no such pain when they pay your fees.

Oh, and one other thing. You wrote that, "... this site is supposed to be the place to post questions on 403b annuity plans ..."

Uh, Intruder, I don't think this site is supposed to be for questions on 403b ANNUITY plans. You see, there are OTHER plans that don't require that teachers invest in those high-fee annuity products. We can actually invest in no load mutual funds, too. Imagine that.

And this from someone who is critical for teachers not being up to snuff on complex IRS regulations!


So why don't you answer corkmeister questions and demonstrate that you are up to snuff on the IRS regs and the rules for payment options of TIAA-CREF contracts.

If the IRS regulations on 403b plans are simple and clear why dont you respond to questions on the regs that are posted on the board?

Also are you stating that TIAA-CREF annuities are high fee products that are not appropriate to discuss on this board ? Perheps Steve S can enlighten you.

#9 lostinretirement

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Posted 06 February 2008 - 09:41 AM

DING DING DING! end of the round, put your gloves down and return to your corners. Relax a little bit. We're not talking about returns, expenses, the IRS, or anything other than how this educator can access their money.

To actually answer your question with the knowledge I have, there is no other way to take the money from TIAA without incurring fees or penalties. I first discovered the differences between TIAA and CREF a few years back, never knowing there were any. The best option, if they can afford the time, is to mesh the transfer allowances of the Plan Document with the payout options. That way money is transferred and not withdrawn. I have not personally done so, but I believe it is possible to use the 10 year payout and pay it into CREF; I've heard of associates doing so 5-10 years before they planned to retire.

and Cork, if you're going to advise clients financially I'm fine with that. I firmly believe that most people need guidance beyond opinions that swirl around the internet. That being said, next time call TIAA and learn to do the research yourself. If you're in over your head admit it to the client, don't go searching forums for answers. And please, do the right thing for the client here. The world of financial institutions is ugly in this country and if TIAA makes you angry you need to look for a new career. They're one of a thousand companies that has a little greed built into their business plan. Talking trash about TIAA to a client only makes you look bad.

Ok, gloves back up, I'm sure I'll get verbally crushed now. Yes yes yes, Vanguard is bliss, annuities have expenses, the new regs are cloudy, and salesmen sell, but it doesn't mean nothing else requires discussion.

#10 sschullo

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Posted 06 February 2008 - 10:20 AM

Intruder,
Along with TR, I demand and want you to keep losing it with your unprevoked and disrespectful comments about teachers who post here and then whine to new posters that the professionals get no respect!

Cork and others,
Intruder, TR1982 and 403bagents are losing clients because of a sea change in retirement plans not because of this site but because the word is slowly getting around that agents who are present in our schools are not good for teachers. I am an alternate chair of my employers 457b oversight community. Our TPA has changed its name from AIG-VALIC to AIG Retirement because everytime the reps went to our schools (we are in Los Angeles Unified), they would run into resistance and the name VALIC was not helping.

The three above named agents are hostile, arrogant and relentless. In the past, pros have come and gone but these three have stayed on because they have the time to fight with us and they are fighting for their surrvival. Of course I am guessing, but put yourself in their situation. Would you spend time at a high priced annuity internet forum and fight constantly with the agents? I think not because we have a "higher calling" and a mission to help educators and fighting with an army of agents on another website is a complete waste of my time.

Newbies, carefully read every post that TR1982, Intruder and 403bagent, they speak volumes and represent the smiling face with the plateful of donuts who are the lounge lizards are your schools.

Have a great day,
Steve

#11 apteacher

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Posted 06 February 2008 - 01:08 PM

QUOTE(intruder @ Feb 5 2008, 05:44 PM) View Post

QUOTE(apteacher @ Feb 5 2008, 02:37 PM) View Post

Intruder,

Your contempt for teachers is remarkable. Poor dears, they just don't understand something as simple and clear as IRS regulations.

If you have teachers as clients, it must really pain you to hold back that contempt. Presumably, you have no such pain when they pay your fees.

Oh, and one other thing. You wrote that, "... this site is supposed to be the place to post questions on 403b annuity plans ..."

Uh, Intruder, I don't think this site is supposed to be for questions on 403b ANNUITY plans. You see, there are OTHER plans that don't require that teachers invest in those high-fee annuity products. We can actually invest in no load mutual funds, too. Imagine that.

And this from someone who is critical for teachers not being up to snuff on complex IRS regulations!


So why don't you answer corkmeister questions and demonstrate that you are up to snuff on the IRS regs and the rules for payment options of TIAA-CREF contracts.

If the IRS regulations on 403b plans are simple and clear why dont you respond to questions on the regs that are posted on the board?

Also are you stating that TIAA-CREF annuities are high fee products that are not appropriate to discuss on this board ? Perheps Steve S can enlighten you.

You did not get my sarcasm, Intruder. Obviously, IRS regulations are anything BUT clear. I haven't the foggiest idea about the regulations that were in question.

Your final question does not address your misrepresentation of this site being for 403b annuity plans. You are avoiding the point that I made.

#12 intruder

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Posted 06 February 2008 - 08:43 PM


AP:

Pardon me if I failed to interpret you comments as sarcasm instead of ingorance? And what is the point you made???

Steve:

Why dont you answer Corks questions since you are so familar with TIAA-CREF products? Or are you just good at publicity?

By the way I dont have any 403b clients nor am I an agent or do I hold any licenses. Unlike you I dont need this site to validate my existance.

What you fail to understand is that this site will exist only as long as it can attract eyeballs. Scaring off new posters with intemperate comments impuning their integrity reduces the number of people who will vist this site and will reduce amounts that advertisers will pay to support it.

Lost:

You are on the right track. The availabilty of cash upon retirement depends on both the type of plan and the distribution options under the Tiaa or Cref product. Steve should know this but doesnt seem willing to tell the audience.

Joel:

You are the only one who understands what needs to be done to find out the answer.

#13 apteacher

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Posted 06 February 2008 - 09:06 PM

QUOTE(intruder @ Feb 6 2008, 05:43 PM) View Post

AP:

Pardon me if I failed to interpret you comments as sarcasm instead of ingorance? And what is the point you made???



Intruder,

Sometimes tone is difficult to discern in forums such as this.

I plead ignorance to the original question, but then again I never purported to have the answer. I am not particularly interested in such arcane topics.

My point concerned your statement that "... this site is supposed to be the place to post questions on 403b annuity plans ..." Perhaps you missed the sarcasm a second time when I merely informed you that some 403b plans are not annuities. A subtle point, and easy to miss, I'm sure.

#14 intruder

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Posted 06 February 2008 - 09:33 PM

QUOTE(apteacher @ Feb 6 2008, 09:06 PM) View Post

QUOTE(intruder @ Feb 6 2008, 05:43 PM) View Post

AP:

Pardon me if I failed to interpret you comments as sarcasm instead of ingorance? And what is the point you made???



Intruder,

Sometimes tone is difficult to discern in forums such as this.

I plead ignorance to the original question, but then again I never purported to have the answer. I am not particularly interested in such arcane topics.

My point concerned your statement that "... this site is supposed to be the place to post questions on 403b annuity plans ..." Perhaps you missed the sarcasm a second time when I merely informed you that some 403b plans are not annuities. A subtle point, and easy to miss, I'm sure.


Pardon my ingorance but the caption to IRC 403b is "Taxability of beneficiary under annuity purchased by section 501(3) organization or public school". I think everyone understands that a 403b annuity includes mutual funds which are a permitted investment for a 403b annuity plan under IRC 403(b)(7).

#15 Guest_Sierra_*

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Posted 06 February 2008 - 09:53 PM

Joel:

You are the only one who understands what needs to be done to find out the answer.
[/quote]

Intruder:

Now that I find you in such a charitable mood I would like you to do the right thing and acknowledge that your statement: "NY and NJ exempt state retirement benefits from state income tax" is wrong.