Jump to content
PurpleReign

Reallocate Investments within TIAA or Rollover to Vanguard

Recommended Posts

Hello all!

I have a 403b from a former employer that is with TIAA; My present allocation is moderately aggressive and I'd like to be more aggressive ( 20 or more years until retirement).  Should I reallocate my investments within TIAA or do a direct rollover to Vanguard (most of my investments are there)?  I have a wide assortment of funds that I could invest in with TIAA including Vanguard's Total Market Stock Index Fund (VTSAX).  Any thoughts?  Thanks in advance.

Share this post


Link to post
Share on other sites

I’d answer that question by asking which option will allow you to build a fully diversified portfolio at the lowest cost. My guess is Vanguard will. 

I believe a potential con of rolling a traditional employer sponsored account into a rollover IRA, is that it makes a backdoor Roth less desirable. This doesn’t affect most people and those it does are already in great shape. 

Share this post


Link to post
Share on other sites

In most cases, it makes sense to roll the assets into an IRA at Vanguard.  That way, you have maximum flexibility and minimal costs.  The only reason I can think of that someone might opt to stay at TIAA-Cref is if they want to utilize the stable value (TIAA Traditional) option, something you can't access in an IRA.  But if you are  decades from retirement and want to invest aggressively, the rollover to an IRA seems like a clear choice.

Share this post


Link to post
Share on other sites

Even with 20 years to go, you want some allocation in fixed accounts. An 80% equity / 20% fixed is an aggressive allocation for most under 45. As you get closer to retirement, increase your percent of fixed accounts. 

TIAA Tradition annuity would be a near perfect fixed account. Principal guarantee, paying 3.0% (or more as interest rates are increasing), no fees (except the spread between what TIAA gets on the open market and the rate credited to you). NO Surrender fees except for their option that pays a higher rate of interest. Be careful you understand which one.

I would transfer the rest to Vanguard and allocate either 50% or 60% to the domestic and 40% to 50% in international stock markets. 

There are no perfect portfolios but their are excellant portfolios that do the heavy lifting to get you where you want. Control costs, diversify, stock-bond split, and rebalance when needed. 

You are in great shape.

Keep up the good work.

Steve

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...