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radase

TIAA Traditional

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Wanted to see if anyone has experience with TIAA Traditional.  Was thinking of using them to have some money in an annuity.

Are the fees high?  

Any surrender period?  

Thank you.

 

 

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My understanding is that it depends on the plan. Are you looking at using an account through an employer (403/457/IRA)? If so, its possible that your employer has a contract with TIAA that has no surrender fees. My wife's employer does this. However, they limit her investment choices to both an annuity only option, and only specific fund choices in that annuity wrapper (high turnover, mostly actively managed). 

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Yes, TIAA is now available through my school district.  Was thinking of using TIAA Traditional in addition to another provider (NEA Direct-Invest or ASPire) within my 403b.  Just want a small portion of my portfolio with a guaranteed minimum rate of return should the market go on its head like 2009.   

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4 hours ago, radase said:

Yes, TIAA is now available through my school district.  Was thinking of using TIAA Traditional in addition to another provider (NEA Direct-Invest or ASPire) within my 403b.  Just want a small portion of my portfolio with a guaranteed minimum rate of return should the market go on its head like 2009.   

Vanguard's Total Bond Market and Intermediate-term Bond Index funds did not loose much during the 2008-2009 downturn. I can see preferring TIAA Traditional because of it's higher guaranteed 3% return compared to the bond funds present return. Maybe concern for rising inflation that results in rising interest rates would be a better reason to use TIAA Traditional? Is the rate actually 3% on your district's TIAA plan? 

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Here in Orange County (FL) TIAA offers a mutual fund option, which I documented here. The cheapest 3 fund portfolio still costs 0.63%, that expense consumes 21% of real profits after 1 year and 26.2% of real profits after 30 years (assuming 6% returns and 3% inflation). There aren't surrender fees with this type of account.

Unless the TIAA reps failed to mention it, they don't offer a guaranteed 3% annuity in our district. I have nothing to add to the debate between a 3% guaranteed return and a bond fund except to provide the historical returns of the two funds Krow mentioned:

2017 = 3.56% and 3.85%
2016 = 2.60% and 2.83%
2015 = 0.40% and 1.27%
2014 = 5.89% and 6.96%
2013 = -2.15% and -3.45%
2012 = 4.15% and 7.02%
2011 = 7.69% and 10.74%
2010 = 6.54% and 9.49%
2009 = 6.04% and 6.90%
2008 = 5.15% and 5.01%
2007 = 7.02% and 7.70%
2006 = 4.36% and 3.98%
2005 = 2.49% and 1.82%
2004 = 4.33% and 5.30%
2003 = 4.04% and 5.70%
2002 = 8.32% and 10.91%

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