TIAA Traditional

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student
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Re: TIAA Traditional

Post by student »

neurosphere wrote: Thu Feb 02, 2023 1:13 pm
ResearchMed wrote: Thu Feb 02, 2023 1:01 pm
neurosphere wrote: Thu Feb 02, 2023 12:55 pm
beernutz wrote: Tue Jan 31, 2023 9:46 pm In a desire to hopefully better understand buckets myself I'm posting an image of my own TIAA Traditional as I can't remember seeing a similar image posted to bogleheads.
Thanks very much for posting this! I had been considering doing the same for a long while, because seeing an actual example where one has money in various vintages can really help solidify understanding.

I have a question though. I have an RC account where I only contributed to in June 2022, where additional amounts are accumulating within the same vintage, which is 6/1/2022 to 6/31/2022. There is an additional amount of 4.25% for that vintage, but all the interest is going back into that same vintage, and that doesn't match with my understanding of how additional amounts work and doesn't match what's appears to be going on in my GSRA account?

We asked about this when some of our Trad Ann (in some accounts) had the "extra interest" (above guaranteed baseline) go into the current vintage, but in other type accounts, it didn't.

IIRC, for some accounts, such as (at the least) TIRA, all of the interest stays with the vintage that generated the interest. The RA account, for example, still has the "extra interest" go into the current vintage, no matter what vintage generated the interest.
Thanks for confirming that I'm not the only one seeing this (not that I thought it was an error or anything). I did read the two page fact sheets for the RC and GSRA and the language/footnotes were identical with respect to additional amounts. 20 minutes of googling (and now 10 more minutes on the TIAA site) has not yet led me to a statement or document about this difference.

If some account types keep the additional in the original vintage, but others pay into the current vintage, this may explain a lot of the confusion that people have about Traditional.
I did rebucketing and at the beginning of Jan, I transferred about $341k into the 5.5% bucket. Now I see about $21 in the Feb 5.25% bucket. Clearly $21 is not the one month interest earned from $341k. So no idea what they are doing.
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Re: TIAA Traditional

Post by crefwatch »

student wrote: Thu Feb 02, 2023 1:46 pm I did rebucketing and at the beginning of Jan, I transferred about $341k into the 5.5% bucket. Now I see about $21 in the Feb 5.25% bucket. Clearly $21 is not the one month interest earned from $341k. So no idea what they are doing.
Try the calculation again after determining the precise guaranteed rate and the difference between that and 5.5%. The first slug of interest goes into the "home" vintage, and the "Additional Amounts" (as they are now called, once long ago called [unwisely] "Dividends") go into the current date vintage.

This information is available in black and white, but admit that they don't "feature" it anywhere.
aristotelian
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Re: TIAA Traditional

Post by aristotelian »

I don't think anyone here really knows. That said, it is a reputable company with a long track record. I recall seeing somewhere it has the same or maybe higher credit rating than the US government. I am guessing they are able to pay a premium out of the profit they make from those who choose to annuitize.
student
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Re: TIAA Traditional

Post by student »

crefwatch wrote: Thu Feb 02, 2023 2:26 pm
student wrote: Thu Feb 02, 2023 1:46 pm I did rebucketing and at the beginning of Jan, I transferred about $341k into the 5.5% bucket. Now I see about $21 in the Feb 5.25% bucket. Clearly $21 is not the one month interest earned from $341k. So no idea what they are doing.
Try the calculation again after determining the precise guaranteed rate and the difference between that and 5.5%. The first slug of interest goes into the "home" vintage, and the "Additional Amounts" (as they are now called, once long ago called [unwisely] "Dividends") go into the current date vintage.

This information is available in black and white, but admit that they don't "feature" it anywhere.
Never mind. I misapplied the rule. It is correct. $21 is one day interest for Feb 1 on the additional 2.25%. Thanks.
itsmeagain
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Re: TIAA Traditional

Post by itsmeagain »

crefwatch wrote: Thu Feb 02, 2023 2:26 pm
student wrote: Thu Feb 02, 2023 1:46 pm I did rebucketing and at the beginning of Jan, I transferred about $341k into the 5.5% bucket. Now I see about $21 in the Feb 5.25% bucket. Clearly $21 is not the one month interest earned from $341k. So no idea what they are doing.
Try the calculation again after determining the precise guaranteed rate and the difference between that and 5.5%. The first slug of interest goes into the "home" vintage, and the "Additional Amounts" (as they are now called, once long ago called [unwisely] "Dividends") go into the current date vintage.

This information is available in black and white, but admit that they don't "feature" it anywhere.
I think crefwatch has it right, student. Think of it this way. You posted on Feb 2, so there's really only one day's new payout that has gone into the February bucket. So 5.5% of $341,000 = $18,755 in a year, or about $51 in one day. Of that, 3% (for most RA and GRA, that's the minimum guaranteed rate) goes into the vintage you purchased in January, and 2.5% goes into the new February vintage. And 2.5/5.5 x 51 = $23. Close enough, I think.

Edit: See student's post above, while I was doing the calculations. With 2.25% instead of 2.5% for the February rate, it looks exact. Yay math!
student
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Re: TIAA Traditional

Post by student »

itsmeagain wrote: Thu Feb 02, 2023 3:19 pm
crefwatch wrote: Thu Feb 02, 2023 2:26 pm
student wrote: Thu Feb 02, 2023 1:46 pm I did rebucketing and at the beginning of Jan, I transferred about $341k into the 5.5% bucket. Now I see about $21 in the Feb 5.25% bucket. Clearly $21 is not the one month interest earned from $341k. So no idea what they are doing.
Try the calculation again after determining the precise guaranteed rate and the difference between that and 5.5%. The first slug of interest goes into the "home" vintage, and the "Additional Amounts" (as they are now called, once long ago called [unwisely] "Dividends") go into the current date vintage.

This information is available in black and white, but admit that they don't "feature" it anywhere.
I think crefwatch has it right, student. Think of it this way. You posted on Feb 2, so there's really only one day's new payout that has gone into the February bucket. So 5.5% of $341,000 = $18,755 in a year, or about $51 in one day. Of that, 3% (for most RA and GRA, that's the minimum guaranteed rate) goes into the vintage you purchased in January, and 2.5% goes into the new February vintage. And 2.5/5.5 x 51 = $23. Close enough, I think.

Edit: See student's post above, while I was doing the calculations. With 2.25% instead of 2.5% for the February rate, it looks exact. Yay math!
Thanks for taking the time to respond.
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oldzey
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Re: TIAA Traditional

Post by oldzey »

student wrote: Tue Jan 31, 2023 11:42 am
petulant wrote: Tue Jan 31, 2023 11:13 am TIAA Traditional uses historical cost accounting rather than mark-to-market accounting.

In historical cost accounting, the institution is continuously buying bonds with different yields and holding them until maturity. The institution has a weighted average yield across these bonds that gives it a portfolio return that it can provide to its stakeholders. These institutions are at risk if there is significant volatility and stakeholders are allowed to withdraw or add money at the historical cost, so the institutions typically have gatekeeping rules that restrict transfers in some way. For example, if an institution buys $100 of bonds in year 1 at 5%, $100 of bonds in year 2 at 3%, and $100 of bonds in year 3 at 6%, then the portfolio rate going into year 4 will be 4.67% or $14.00, and its reported balance might still be $300 (assuming no reinvestment of interest). The institution never reported a loss since its historical cost accounting hides volatility. This approach more or less describes actuarial approaches like TIAA Traditional as well as non-variable life insurance and annuities. (Note, TIAA Traditional's actual crediting rate might include other factors as well, but this explanation is why you don't see a huge negative swing in the performance.)

A different institution using mark-to-market accounting would report results differently even if all future returns are exactly the same. For example, after buying $100 of bonds in year 1 at 5%, the interest rates fall to 3%, which will result in a higher reported balance to roughly equalize the YTM of the old 5% bonds and the new 3% bonds. The fund will then buy $100 of 3% bonds. Hence, the return during year 2 will be reported as higher than 5% due its appreciation, but its new forward-looking return will actually be 3%. During year 3, the interest rates rise to 6%, which will cause the old 5% and 3% bonds to lose market value to roughly equalize the YTM to 6%. Year 3 will look like a dreadful year for the mark-to-market fund, but the end of that year is in fact the best forward-looking point in time for the fund yet since it is now expected to earn 6% going forward. Nevertheless, assuming the same cashflows into the fund as in the historical cost institution, the actual interest expected in year 4 will still be $14.00. (That's $5 from the first bond, $3 from the second bond, and $6 from the third bond.) The YTM is higher since the 5% and 3% bonds have lower market value than par and hence will appreciate until maturity. Further, since the fund value is continuously priced at fair market value, the fund is more or less indifferent to stakeholders withdrawing money or adding money. This approach describes ETFs and traditional mutual funds.

Which approach is better is arguable.
Thanks for the nice explanation.
+1

Very well-written, petulant!
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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oldzey
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Re: TIAA Traditional

Post by oldzey »

crefwatch wrote: Tue Jan 31, 2023 2:44 pm
Raabe34 wrote: Tue Jan 31, 2023 12:44 pm I don't think it's a ponzi but there was basically a "just trust him" concept with Madoff also. Why can't TIAA come out and spell more of it out to people? I've tried to find returns on their general account but can't seem to find anything, I'm not well schooled in insurance companies and trying to learn.
I agree that someone should avoid investing in products they don't understand. (I mean that as a Bogleheads quote, not as a lecture to you .... )

But vast numbers of people, for 100 years, have invested in TIAA Traditional. When I started teaching, in 1974, I was NOT PERMITTED to put more than half my salary-reduction into the one other investment OTHER than TIAA Traditional. That's because many Econ profs and skeptical faculty wrote statements like you have. But they were writing about CREF Stock VA Account, which at the time was an S&P 500 virtually-index fund. Yeah, there was a lot of resistance to "risky equities" for faculty retirement in 1952 when CREF was set up.

Anyway, "TIAA", as in "TIAA Traditional", is a NY State regulated insurance company, one that has an A.M. Best rating of A++. Sure, insurance companies go out of business. But it's apples to oranges to compare Madoff and a company regulated by a relatively well-funded Department of Insurance.

Unfortunately, the four letters "TIAA" mean more than one thing, since TIAA re-branded their entire retirement business, formerly known as "TIAA-CREF". You cannot expect to find SEC-regulated reports on a non-fractional-ownership insurance product, in any state. That doesn't make them shady. The two companies have a total of $1.3 Trillion [corrected] assets under management. Compare that to some other companies.

I don't mean to denigrate your skepticism. But what you really should be annoyed about is the (in many versions of TIAA Traditional) 7 to 9-year restrictions on withdrawals, or the fact that it is not a fractional-ownership product like a mutual fund. It's "merely" a PROMISE (i.e. a contract) with the TIAA Insurance Company. (I don't agree with that as an "annoyance", but it's frequently complained about.)

I've just built a straw man, but the withdrawal restriction is part of the answer to your original question, as I'm sure you can see.

My mother chose to annuitize more than half her money in CREF Stock upon retirement. Because of stock returns from 1990-2021 (her retired years), she (who was not a big "investor") used to say that she did much better than "the other old ladies in the teacher's lounge." They were so conservative that they annuitized 100% TIAA Traditional.

I forget the exact date, but in the 1930s, TIAA found itself unable to maintain their guaranteed rate of 4%. They borrowed money, and asked their (charitable) founding donor for more money. But they kept their promises to EVERY customer at the time. And they changed the (pay-in period) guarantee to 3% for "new money" from then on.

You have a lot of reading to do:

How Solid is TIAA Traditional?
https://community.morningstar.com/s/que ... raditional
viewtopic.php?f=10&t=280858
viewtopic.php?f=10&t=344249

TIAA Trad White Paper
https://www.tiaa.org/public/pdf/TT_FAQ.pdf

Should I move from TIAA to another provider?
viewtopic.php?f=1&t=327663
viewtopic.php?f=1&t=327725

What the heck is TIAA?
viewtopic.php?f=2&t=324239
viewtopic.php?f=2&t=366802
CREF:
viewtopic.php?f=1&t=367072

Why Should I use TIAA Traditional?
viewtopic.php?f=1&t=318503
viewtopic.php?t=315414
www.tiaa.org/public/pdf/compliance/tiaa ... -paper.pdf
https://www.tiaa.org/public/pdf/making- ... rement.pdf
Thank you for the links to these resources, crefwatch!
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
George Kaplan
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Re: TIAA Traditional

Post by George Kaplan »

crefwatch wrote: Tue Jan 31, 2023 2:44 pm
Raabe34 wrote: Tue Jan 31, 2023 12:44 pm I don't think it's a ponzi but there was basically a "just trust him" concept with Madoff also. Why can't TIAA come out and spell more of it out to people? I've tried to find returns on their general account but can't seem to find anything, I'm not well schooled in insurance companies and trying to learn.
I agree that someone should avoid investing in products they don't understand. (I mean that as a Bogleheads quote, not as a lecture to you .... )

But vast numbers of people, for 100 years, have invested in TIAA Traditional. When I started teaching, in 1974, I was NOT PERMITTED to put more than half my salary-reduction into the one other investment OTHER than TIAA Traditional. That's because many Econ profs and skeptical faculty wrote statements like you have. But they were writing about CREF Stock VA Account, which at the time was an S&P 500 virtually-index fund. Yeah, there was a lot of resistance to "risky equities" for faculty retirement in 1952 when CREF was set up.

Anyway, "TIAA", as in "TIAA Traditional", is a NY State regulated insurance company, one that has an A.M. Best rating of A++. Sure, insurance companies go out of business. But it's apples to oranges to compare Madoff and a company regulated by a relatively well-funded Department of Insurance.

Unfortunately, the four letters "TIAA" mean more than one thing, since TIAA re-branded their entire retirement business, formerly known as "TIAA-CREF". You cannot expect to find SEC-regulated reports on a non-fractional-ownership insurance product, in any state. That doesn't make them shady. The two companies have a total of $1.3 Trillion [corrected] assets under management. Compare that to some other companies.

I don't mean to denigrate your skepticism. But what you really should be annoyed about is the (in many versions of TIAA Traditional) 7 to 9-year restrictions on withdrawals, or the fact that it is not a fractional-ownership product like a mutual fund. It's "merely" a PROMISE (i.e. a contract) with the TIAA Insurance Company. (I don't agree with that as an "annoyance", but it's frequently complained about.)

I've just built a straw man, but the withdrawal restriction is part of the answer to your original question, as I'm sure you can see.

My mother chose to annuitize more than half her money in CREF Stock upon retirement. Because of stock returns from 1990-2021 (her retired years), she (who was not a big "investor") used to say that she did much better than "the other old ladies in the teacher's lounge." They were so conservative that they annuitized 100% TIAA Traditional.

I forget the exact date, but in the 1930s, TIAA found itself unable to maintain their guaranteed rate of 4%. They borrowed money, and asked their (charitable) founding donor for more money. But they kept their promises to EVERY customer at the time. And they changed the (pay-in period) guarantee to 3% for "new money" from then on.

You have a lot of reading to do:

How Solid is TIAA Traditional?
https://community.morningstar.com/s/que ... raditional
viewtopic.php?f=10&t=280858
viewtopic.php?f=10&t=344249

TIAA Trad White Paper
https://www.tiaa.org/public/pdf/TT_FAQ.pdf

Should I move from TIAA to another provider?
viewtopic.php?f=1&t=327663
viewtopic.php?f=1&t=327725

What the heck is TIAA?
viewtopic.php?f=2&t=324239
viewtopic.php?f=2&t=366802
CREF:
viewtopic.php?f=1&t=367072

Why Should I use TIAA Traditional?
viewtopic.php?f=1&t=318503
viewtopic.php?t=315414
www.tiaa.org/public/pdf/compliance/tiaa ... -paper.pdf
https://www.tiaa.org/public/pdf/making- ... rement.pdf
Who paid the interest on the borrowed money?
Try now. We can only lose.
crefwatch
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Re: TIAA Traditional

Post by crefwatch »

George Kaplan wrote: Sun Mar 05, 2023 1:45 am
crefwatch wrote: Tue Jan 31, 2023 2:44 pm I forget the exact date, but in the 1930s, TIAA found itself unable to maintain their guaranteed rate of 4%. They borrowed money, and asked their (charitable) founding donor for more money. But they kept their promises to EVERY customer at the time. And they changed the (pay-in period) guarantee to 3% for "new money" from then on.
Who paid the interest on the borrowed money?
I'm sorry, but you are looking for ER thieves under the bed. TIAA Traditional is, and always has been simply a contract with an insurance company. It is not a fractional-ownership product like a mutual fund, and it does not have an SEC-regulated Expense Ratio. It is a very opaque product. Since interest rates were very low at the time (1935-1940) that TIAA ran into trouble, the fact that they paid their promises (i.e. minimum guaranteed rate and payout of annuitized funds), it has to be assumed that for a few years, TIAA paid the interest.

It's perfectly likely that paying off those loans could have affected returns on the TIAA General Account (in which we cannot invest) in subsequent years. But TIAA Participants still had a 3% guaranteed minimum rate, which was pretty good at the time.

I would counter with another question: When Mutual Benefit Life (Newark, NJ) defaulted on its annuity products (during my lifetime), who was paying for food for the retirees who depended on those annuities, until the state finally, 8 or more years later, came up with partial restitution? Nobody. They went hungry. Alas, the CEO conveniently died soon after. I wish the CIA had looked to make sure it was really his body!
McQ
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Re: TIAA Traditional

Post by McQ »

I thought I might piggyback on this existing thread for an analysis of what changed on March 1st.

As most know, TIAA updates its crediting rates for older vintages once a year in March (crediting rates for the current month are reset each month through the following March 1st).

Given the huge movement in rates last year I decided to take a screenshot on February 28th to compare to rates post March 1st. The screen shot below is for one of my RA accounts. Generally, last year and this, the crediting rate for the illiquid RA/GRA accounts has been 75 bp higher than for the liquid SRA/GSRA accounts; so for simplicity, I will just look at the RA account before and after March 1st with an occasional mention of the corresponding SRA rate.

Here is the Before image:

Image

And here is the After image:

Image

What changed:

1. The oldest vintage didn’t start in 1999, that’s just the oldest contribution I have. Think of it as pre-2006 contributions and guaranteed interest on same. The rate here increased by 60 bp, to a not unattractive 5.25%. Presumably enough of the older underlying bonds matured for new purchases at higher yields to move the needle.

2. The next oldest vintage (2006-2011) only increased 45 bp, to a not-terrible 4.80%. Note how much smaller my dollar balance is for this vintage, reflecting the fact that no contributions were made to this account in that period, this is just the compounded value of the above-the-guaranteed interest from the main vintage.

3. Next oldest vintage (2012-2019) also went up 45 bp.

4. The problematic vintage of course is 2020-2021, when interest rates hit their nadir at the tippy-top of the great bond bull market that began in late 1981. This rate only increased 30 bp. You can do better on a 7 year Treasury. (SRA rate only went up to 3.25% from the floor at 3.0%)

5. What had been eight buckets for 2022, the period of rapid rise in rates, has been consolidated to three, and no simple summary can be offered. Of note is the bucket beginning 11/01, where the rate has gone up from 6.25% to 6.60%. The current bottom for the ongoing bond bear market was in late October, so it appears that TIAA backed up the truck and bought and bought, to the benefit of participants. Feeling good about my transfers out of Real Estate into my TIAA SRA account in that period!

6. The most recent (2023) buckets have been maintained at their existing rate.

Speaking personally, I’m pleased with the amount crediting rates have increased; I confidently expect that next March will see a further increase in rate on the older vintages (absent a scorching rally in the bond market before then).

Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.

But if I had a big chunk in the 2020-2021 vintage … I might indeed take action. Could be a long time before that vintage, in the SRA accounts, has a yield that climbs out of the 3s.
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oldzey
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Re: TIAA Traditional

Post by oldzey »

I put pdfs of most of the old February 28th, 2023 rates in my TIAA Traditional archive: https://www.dropbox.com/sh/y08d3qbmvisa ... QrZIa?dl=0

Here's a link to the new rates as of March 1, 2023, for comparison: viewtopic.php?p=7096298#p7096298
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
dknightd
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Re: TIAA Traditional

Post by dknightd »

McQ wrote: Sun Mar 05, 2023 4:36 pm
But if I had a big chunk in the 2020-2021 vintage … I might indeed take action. Could be a long time before that vintage, in the SRA accounts, has a yield that climbs out of the 3s.
It could also be that they change the guaranteed amount to less than 3%.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
student
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Re: TIAA Traditional

Post by student »

McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 5.05% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.

Edit: Corrected a typo.
Last edited by student on Mon Mar 06, 2023 8:06 am, edited 1 time in total.
dknightd
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Re: TIAA Traditional

Post by dknightd »

student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 4.25% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.
But during those 120 days they could lower the guaranteed rates.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
student
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Re: TIAA Traditional

Post by student »

dknightd wrote: Mon Mar 06, 2023 8:01 am
student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 4.25% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.
But during those 120 days they could lower the guaranteed rates.
You mean the crediting rate that is guaranteed until next March? Yes. There is a risk. That's why I build in a drop but I made a typo, I meant Even if the rate drops from 5.25% to <5.05%> when you move the money back to it, it is still at least a 1% difference. I will update the post.

Edit: correction.
dknightd
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Re: TIAA Traditional

Post by dknightd »

student wrote: Mon Mar 06, 2023 8:05 am
dknightd wrote: Mon Mar 06, 2023 8:01 am
student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 4.25% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.
But during those 120 days they could lower the guaranteed rates.
You mean the crediting rate that is guaranteed until next March? Yes. There is a risk. That's why I build in a drop but I made a typo, I meant Even if the rate drops from 5.25% to <5.05%> when you move the money back to it, it is still at least a 1% difference. I will update the post.

Edit: correction.
No, you misunderstand, or perhaps I do. You are guaranteed 3%, or more, on your current investments. TIAA could change the rules while you are sitting out 120 days. They could, if they want, change to 0% guarantee.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
student
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Re: TIAA Traditional

Post by student »

dknightd wrote: Mon Mar 06, 2023 8:54 am
student wrote: Mon Mar 06, 2023 8:05 am
dknightd wrote: Mon Mar 06, 2023 8:01 am
student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 4.25% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.
But during those 120 days they could lower the guaranteed rates.
You mean the crediting rate that is guaranteed until next March? Yes. There is a risk. That's why I build in a drop but I made a typo, I meant Even if the rate drops from 5.25% to <5.05%> when you move the money back to it, it is still at least a 1% difference. I will update the post.

Edit: correction.
No, you misunderstand, or perhaps I do. You are guaranteed 3%, or more, on your current investments. TIAA could change the rules while you are sitting out 120 days. They could, if they want, change to 0% guarantee.
The 3% guaranteed rate is a contractual obligation that cannot be changed.
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Re: TIAA Traditional

Post by dknightd »

ha! They can change this if they want to.
edit: You could exchange a 3% grantee, for 1%, if they happened to change their mind while you were waiting for 120 days to pass.
Last edited by dknightd on Mon Mar 06, 2023 9:38 am, edited 1 time in total.
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student
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Re: TIAA Traditional

Post by student »

dknightd wrote: Mon Mar 06, 2023 9:20 am ha! They can change this if they want to
They cannot do that. It is in the contract. That's why during the low rate period, they introduced the RC version with 1-3% guaranteed rate to (where the crediting rate is higher) to entice institutions to switch version. The risk of the move is the potential drop of interest rate and the infinitesimal risk of TIAA stop accepting new contributions.
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Re: TIAA Traditional

Post by dknightd »

student wrote: Mon Mar 06, 2023 9:38 am
dknightd wrote: Mon Mar 06, 2023 9:20 am ha! They can change this if they want to
They cannot do that. It is in the contract. That's why during the low rate period, they introduced the RC version with 1-3% guaranteed rate to (where the crediting rate is higher) to entice institutions to switch version. The risk of the move is the potential drop of interest rate and the infinitesimal risk of TIAA stop accepting new contributions.
It is only in the contract, for money that does move.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
student
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Re: TIAA Traditional

Post by student »

dknightd wrote: Mon Mar 06, 2023 9:48 am
student wrote: Mon Mar 06, 2023 9:38 am
dknightd wrote: Mon Mar 06, 2023 9:20 am ha! They can change this if they want to
They cannot do that. It is in the contract. That's why during the low rate period, they introduced the RC version with 1-3% guaranteed rate to (where the crediting rate is higher) to entice institutions to switch version. The risk of the move is the potential drop of interest rate and the infinitesimal risk of TIAA stop accepting new contributions.
It is only in the contract, for money that does move.
What are you talking about? As long as TIAA accepts new money into the contract, the 3% guaranteed rate holds.

Edit: Did someone hack your account? It seems that you are giving strange short responses today in this thread and in viewtopic.php?t=399154
dknightd
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Re: TIAA Traditional

Post by dknightd »

student wrote: Mon Mar 06, 2023 9:50 am
Edit: Did someone hack your account? It seems that you are giving strange short responses today in this thread and in viewtopic.php?t=399154
Interesting observation. I don't think my account was hacked. But I was having a weird day. I should probably not post when that happens.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
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Re: TIAA Traditional

Post by tibbitts »

dknightd wrote: Mon Mar 06, 2023 9:48 am
student wrote: Mon Mar 06, 2023 9:38 am
dknightd wrote: Mon Mar 06, 2023 9:20 am ha! They can change this if they want to
They cannot do that. It is in the contract. That's why during the low rate period, they introduced the RC version with 1-3% guaranteed rate to (where the crediting rate is higher) to entice institutions to switch version. The risk of the move is the potential drop of interest rate and the infinitesimal risk of TIAA stop accepting new contributions.
It is only in the contract, for money that does move.
I think you meant for money that does not move. But in the past what TIAA has done is to announce changes in advance, and create new accounts/contracts with the new terms. So it might be possible, but seemingly very unlikely, that the OP could be subject to some detrimental action. For example when new IRA money went from 3% to 1%, it was announced in advance, and money couldn't be moved into Traditional at the old 3% rate after the cutoff date, even from other options in the same existing contract.
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Re: TIAA Traditional

Post by neurosphere »

student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 5.05% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.

Edit: Corrected a typo.
I've convinced myself to do this with at least a portion of my 3.25% money (it's 99% at 3.25% so proration doesn't affect me). I'll report back in 120 (plus a buffer) days!
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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oldzey
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Re: TIAA Traditional

Post by oldzey »

Here's another useful resource for all things TIAA (including TIAA Traditional): https://ybbpersonalfinance.proboards.co ... d/399/tiaa

Best,
oldzey
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KeepGrowing
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Re: TIAA Traditional

Post by KeepGrowing »

neurosphere wrote: Mon Mar 06, 2023 3:02 pm
student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 5.05% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.

Edit: Corrected a typo.
I've convinced myself to do this with at least a portion of my 3.25% money (it's 99% at 3.25% so proration doesn't affect me). I'll report back in 120 (plus a buffer) days!
When you move your money out of TRAD for 120+ days, what do you move it into for that time period?

Thanks.
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ResearchMed
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Re: TIAA Traditional

Post by ResearchMed »

KeepGrowing wrote: Mon Mar 06, 2023 6:31 pm
neurosphere wrote: Mon Mar 06, 2023 3:02 pm
student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 5.05% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.

Edit: Corrected a typo.
I've convinced myself to do this with at least a portion of my 3.25% money (it's 99% at 3.25% so proration doesn't affect me). I'll report back in 120 (plus a buffer) days!
When you move your money out of TRAD for 120+ days, what do you move it into for that time period?

Thanks.

That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
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KeepGrowing
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Re: TIAA Traditional

Post by KeepGrowing »

ResearchMed wrote: Mon Mar 06, 2023 6:37 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:31 pm
neurosphere wrote: Mon Mar 06, 2023 3:02 pm
student wrote: Mon Mar 06, 2023 7:36 am
McQ wrote: Sun Mar 05, 2023 4:36 pm Even in my SRA, where I don’t have any contributions before 2009, the two oldest vintages (through 2019) now have rates of 4.05% and 3.80%, respectively, relative to a this-month rate of 5.25%. Not enough of a gap to motivate a complex series of changes, IMO.
Even if the rate drops from 5.25% to 5.05% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.

Edit: Corrected a typo.
I've convinced myself to do this with at least a portion of my 3.25% money (it's 99% at 3.25% so proration doesn't affect me). I'll report back in 120 (plus a buffer) days!
When you move your money out of TRAD for 120+ days, what do you move it into for that time period?

Thanks.

That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
I see. It seems I only have TIAA core offerings and I don't see a TIAA MM fund listed, so that's why I wondered.

Thank you for your reply.
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Re: TIAA Traditional

Post by student »

KeepGrowing wrote: Mon Mar 06, 2023 6:44 pm
ResearchMed wrote: Mon Mar 06, 2023 6:37 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:31 pm
neurosphere wrote: Mon Mar 06, 2023 3:02 pm
student wrote: Mon Mar 06, 2023 7:36 am

Even if the rate drops from 5.25% to 5.05% when you move the money back to it, it is still at least a 1% difference. It is not that complicated to make the move. 5 minutes now and 5 minutes in 120 days.

Edit: Corrected a typo.
I've convinced myself to do this with at least a portion of my 3.25% money (it's 99% at 3.25% so proration doesn't affect me). I'll report back in 120 (plus a buffer) days!
When you move your money out of TRAD for 120+ days, what do you move it into for that time period?

Thanks.

That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
I see. It seems I only have TIAA core offerings and I don't see a TIAA MM fund listed, so that's why I wondered.

Thank you for your reply.
This is odd. Usually 403b/401k menu of funds has at least one MM fund listed.
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ResearchMed
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Re: TIAA Traditional

Post by ResearchMed »

student wrote: Mon Mar 06, 2023 6:47 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:44 pm
ResearchMed wrote: Mon Mar 06, 2023 6:37 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:31 pm
neurosphere wrote: Mon Mar 06, 2023 3:02 pm

I've convinced myself to do this with at least a portion of my 3.25% money (it's 99% at 3.25% so proration doesn't affect me). I'll report back in 120 (plus a buffer) days!
When you move your money out of TRAD for 120+ days, what do you move it into for that time period?

Thanks.

That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
I see. It seems I only have TIAA core offerings and I don't see a TIAA MM fund listed, so that's why I wondered.

Thank you for your reply.
This is odd. Usually 403b/401k menu of funds has at least one MM fund listed.

KeepGrowiing: The MM fund might not be a TIAA fund. Look carefully at the funds offered in your account/plan.
We have a Vanguard MM Fund in our core, where the illiquid Trad Ann is. We couldn't move that money, of course, so the Vanguard MM fund in that account was irrelevant.

In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
So we used the TIAA MM fund there.

If you aren't sure, you could post the choices available, any funds that might be money market funds, and we could help.

RM
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KeepGrowing
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Re: TIAA Traditional

Post by KeepGrowing »

ResearchMed wrote: Mon Mar 06, 2023 6:53 pm
student wrote: Mon Mar 06, 2023 6:47 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:44 pm
ResearchMed wrote: Mon Mar 06, 2023 6:37 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:31 pm

When you move your money out of TRAD for 120+ days, what do you move it into for that time period?

Thanks.

That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
I see. It seems I only have TIAA core offerings and I don't see a TIAA MM fund listed, so that's why I wondered.

Thank you for your reply.
This is odd. Usually 403b/401k menu of funds has at least one MM fund listed.

KeepGrowiing: The MM fund might not be a TIAA fund. Look carefully at the funds offered in your account/plan.
We have a Vanguard MM Fund in our core, where the illiquid Trad Ann is. We couldn't move that money, of course, so the Vanguard MM fund in that account was irrelevant.

In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
So we used the TIAA MM fund there.

If you aren't sure, you could post the choices available, any funds that might be money market funds, and we could help.

RM
Thanks to you both for encouraging me to look again. Now I see - CREF Money Market. This is very good to know!
student
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Re: TIAA Traditional

Post by student »

KeepGrowing wrote: Mon Mar 06, 2023 7:03 pm
ResearchMed wrote: Mon Mar 06, 2023 6:53 pm
student wrote: Mon Mar 06, 2023 6:47 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:44 pm
ResearchMed wrote: Mon Mar 06, 2023 6:37 pm


That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
I see. It seems I only have TIAA core offerings and I don't see a TIAA MM fund listed, so that's why I wondered.

Thank you for your reply.
This is odd. Usually 403b/401k menu of funds has at least one MM fund listed.

KeepGrowiing: The MM fund might not be a TIAA fund. Look carefully at the funds offered in your account/plan.
We have a Vanguard MM Fund in our core, where the illiquid Trad Ann is. We couldn't move that money, of course, so the Vanguard MM fund in that account was irrelevant.

In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
So we used the TIAA MM fund there.

If you aren't sure, you could post the choices available, any funds that might be money market funds, and we could help.

RM
Thanks to you both for encouraging me to look again. Now I see - CREF Money Market. This is very good to know!
Yes. This is it. What share class do you have? Unless you have the "worst" R1 share, you will get at least 4.30% per annum. (Last I checked.) CREF is the name that they use for variable annuities.
Last edited by student on Mon Mar 06, 2023 7:10 pm, edited 1 time in total.
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neurosphere
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Re: TIAA Traditional

Post by neurosphere »

ResearchMed wrote: Mon Mar 06, 2023 6:53 pm In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
Thanks for this warning. I have the VG MMF and the TIAA version with very similar rates. But I did not know there might be a fee. I don't see anything obvious online with respect to transaction fees. And I did a small test move and it did not warn me about any fees. Is it possible there is not a transaction fee in this case, or any guidance on where to look?
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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ResearchMed
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Re: TIAA Traditional

Post by ResearchMed »

KeepGrowing wrote: Mon Mar 06, 2023 7:03 pm
ResearchMed wrote: Mon Mar 06, 2023 6:53 pm
student wrote: Mon Mar 06, 2023 6:47 pm
KeepGrowing wrote: Mon Mar 06, 2023 6:44 pm
ResearchMed wrote: Mon Mar 06, 2023 6:37 pm


That depends upon what is available in one's plan, or even if the Trad Ann is in an account where money can be moved in and out (usually not 403b plans, and that would definitely not be the illiquid version, of course).

Some of us could move it into a Vanguard Treasury MM Fund (or *any* MM fund; *any* mutual fund at all, almost). Others had to chose within the TIAA core offerings if they didn't have a brokerage option.

Or into a TIAA MM fund. There are quite a few good options these days, where the differential isn't too much.

RM
I see. It seems I only have TIAA core offerings and I don't see a TIAA MM fund listed, so that's why I wondered.

Thank you for your reply.
This is odd. Usually 403b/401k menu of funds has at least one MM fund listed.

KeepGrowiing: The MM fund might not be a TIAA fund. Look carefully at the funds offered in your account/plan.
We have a Vanguard MM Fund in our core, where the illiquid Trad Ann is. We couldn't move that money, of course, so the Vanguard MM fund in that account was irrelevant.

In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
So we used the TIAA MM fund there.

If you aren't sure, you could post the choices available, any funds that might be money market funds, and we could help.

RM
Thanks to you both for encouraging me to look again. Now I see - CREF Money Market. This is very good to know!

Good, but DO take a close look at that. Depending upon which "class" you have, the rate may not be all that great. But it might not be too bad if there's no other choice.
Some of this depends upon the size of your employer and which category/class their TIAA plan is.

These days, that MM fund is probably a better idea than any other fund that might be fluctuating (including bond funds these days), so you don't end up with a loss when you are ready to return the money to Trad Ann.

RM
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student
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Re: TIAA Traditional

Post by student »

neurosphere wrote: Mon Mar 06, 2023 7:07 pm
ResearchMed wrote: Mon Mar 06, 2023 6:53 pm In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
Thanks for this warning. I have the VG MMF and the TIAA version with very similar rates. But I did not know there might be a fee. I don't see anything obvious online with respect to transaction fees. And I did a small test move and it did not warn me about any fees. Is it possible there is not a transaction fee in this case, or any guidance on where to look?
I think you are likely safe. If both have similar rate, then just go with the version from TIAA. About 4.3% per annum?
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Re: TIAA Traditional

Post by ResearchMed »

neurosphere wrote: Mon Mar 06, 2023 7:07 pm
ResearchMed wrote: Mon Mar 06, 2023 6:53 pm In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
Thanks for this warning. I have the VG MMF and the TIAA version with very similar rates. But I did not know there might be a fee. I don't see anything obvious online with respect to transaction fees. And I did a small test move and it did not warn me about any fees. Is it possible there is not a transaction fee in this case, or any guidance on where to look?

Is the VG MMF in your "core" section, or in a brokerage option.

My understanding (and our current experience) is that in the core area, no transaction fees.
In the brokerage section, possibly yes. It's not an onerous fee, and for a large transaction amount, it would vanish into rounding error, but still.. And it depends upon the comparison of the rates in MM funds available, of course.

RM
This signature is a placebo. You are in the control group.
KeepGrowing
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Re: TIAA Traditional

Post by KeepGrowing »

student wrote: Mon Mar 06, 2023 7:07 pm
KeepGrowing wrote: Mon Mar 06, 2023 7:03 pm
Thanks to you both for encouraging me to look again. Now I see - CREF Money Market. This is very good to know!
Yes. This is it. What share class do you have? Unless you have the "worst" R1 share, you will get at least 4.30% per annum. (Last I checked.) CREF is the name that they use for variable annuities.
I have R3, with 7-day current/effective yield listed as 4.44%/4.54%. Nice.
student
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Re: TIAA Traditional

Post by student »

KeepGrowing wrote: Mon Mar 06, 2023 7:13 pm
student wrote: Mon Mar 06, 2023 7:07 pm
KeepGrowing wrote: Mon Mar 06, 2023 7:03 pm
Thanks to you both for encouraging me to look again. Now I see - CREF Money Market. This is very good to know!
Yes. This is it. What share class do you have? Unless you have the "worst" R1 share, you will get at least 4.30% per annum. (Last I checked.) CREF is the name that they use for variable annuities.
I have R3, with 7-day current/effective yield listed as 4.44%/4.54%. Nice.
Nice. You must be at a big place. You are winning from the day you transfer out. Win-win.
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ResearchMed
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Re: TIAA Traditional

Post by ResearchMed »

KeepGrowing wrote: Mon Mar 06, 2023 7:13 pm
student wrote: Mon Mar 06, 2023 7:07 pm
KeepGrowing wrote: Mon Mar 06, 2023 7:03 pm
Thanks to you both for encouraging me to look again. Now I see - CREF Money Market. This is very good to know!
Yes. This is it. What share class do you have? Unless you have the "worst" R1 share, you will get at least 4.30% per annum. (Last I checked.) CREF is the name that they use for variable annuities.
I have R3, with 7-day current/effective yield listed as 4.44%/4.54%. Nice.

R3 is "good". :happy The R2 and especially R1 have the highest expense ratios, for the *same* funds/variable annuities.
TREA (the real estate account) has the same er for all classes (and it's best to ignore that, as it's not the same as an ordinary "expense ratio").

RM
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KeepGrowing
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Re: TIAA Traditional

Post by KeepGrowing »

ResearchMed wrote: Mon Mar 06, 2023 7:16 pm
R3 is "good". :happy The R2 and especially R1 have the highest expense ratios, for the *same* funds/variable annuities.
TREA (the real estate account) has the same er for all classes (and it's best to ignore that, as it's not the same as an ordinary "expense ratio").

RM
Thanks again, student, ResearchMed, and all! I've learned some important things about TIAA today.
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Re: TIAA Traditional

Post by neurosphere »

ResearchMed wrote: Mon Mar 06, 2023 7:10 pm
neurosphere wrote: Mon Mar 06, 2023 7:07 pm
ResearchMed wrote: Mon Mar 06, 2023 6:53 pm In the account where we *could* move the money, with the liquid Trad Ann, we could have selected the Vanguard MM fund, but in *that* account, there would be a transaction fee (even though in the other account, there would not be).
Thanks for this warning. I have the VG MMF and the TIAA version with very similar rates. But I did not know there might be a fee. I don't see anything obvious online with respect to transaction fees. And I did a small test move and it did not warn me about any fees. Is it possible there is not a transaction fee in this case, or any guidance on where to look?

Is the VG MMF in your "core" section, or in a brokerage option.

My understanding (and our current experience) is that in the core area, no transaction fees.
In the brokerage section, possibly yes. It's not an onerous fee, and for a large transaction amount, it would vanish into rounding error, but still.. And it depends upon the comparison of the rates in MM funds available, of course.
Thanks.

As far as I can tell it's just listed among all the other mutual fund options, so I assume it's not a brokerage option. Interestingly, the TIAA MMF is paying slightly more than Vanguard's, but based on the history (e.g. YTD return) it seems it lags slightly.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
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Re: TIAA Traditional

Post by House Blend »

neurosphere wrote: Mon Mar 06, 2023 7:28 pm As far as I can tell it's just listed among all the other mutual fund options, so I assume it's not a brokerage option. Interestingly, the TIAA MMF is paying slightly more than Vanguard's, but based on the history (e.g. YTD return) it seems it lags slightly.
Regarding the bolded part, caveat emptor.

TIAA displays stale (sometimes month old) data when looking up yields and returns of 3rd party funds available in your plan.

My plan offers VUSXX (VG Treasury MMF, ER 0.09%) and TCIXX (TIAA MMF Institutional share class, ER 0.13%). Comparing them @ tiaa.org today shows an SEC yield for VUSXX dated 2/28 and for TCIXX dated 3/06. Fortunately the YTD returns are on the same date at the moment. When I last checked around March 1, the YTD return for VUSXX was from January 31 but TCIXX was up to date.

And TIAA also provides what they call an "effective yield". When you read the fine print, it is their calculation of the effects of compounding, assuming that current rates stay constant for one year.

However, what they report as "effective yield" for VUSXX is the same as the SEC yield and therefore obviously wrong.
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neurosphere
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Re: TIAA Traditional

Post by neurosphere »

House Blend wrote: Tue Mar 07, 2023 8:56 am
neurosphere wrote: Mon Mar 06, 2023 7:28 pm As far as I can tell it's just listed among all the other mutual fund options, so I assume it's not a brokerage option. Interestingly, the TIAA MMF is paying slightly more than Vanguard's, but based on the history (e.g. YTD return) it seems it lags slightly.
Regarding the bolded part, caveat emptor.

TIAA displays stale (sometimes month old) data when looking up yields and returns of 3rd party funds available in your plan.
Thanks for the warning.

For TCIXX it shows a current and effective yield of 4.52%/4.62% "as of" March 6. But for the Vanguard Federal it shows 4.52%/4.52% "as of 02/28". I think today's SEC yield for the Fed money market is actually 4.51%. But I'll bet there are obvious differences when rates are changing steeply.

The TIAA institutional money market (TCIXX) is probably the second best I've seen next to Vanguard's. Of course, anyone can get VMFXX anywhere (not necessarily in employer plans but in general) and very few have access to TIAAs institutional MMF. But I would certainly be content to have only TCIXX in my plan! On the other hand, if not for making this move out of Traditional and back, I probably would never use a MMF in a 403b/401k in the first place! :)
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes" (even in taxable accounts).
Trakl
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Re: TIAA Traditional

Post by Trakl »

My spouse and I used Traditional in our 403b accounts for the last 20 years but as retirement approaches I went ahead and initiated the 10 year cash out process. We'll be using bond funds instead going forward for the fixed income portion of our asset allocation. It may well be that we don't get as good a return as we would have with Traditional. I don't care. Getting out of Traditional won't make or break my bottom line. Getting out of Traditional will simplify my life when I retire and roll everything from TIAA to Vanguard, as planned. And best of all, I'll never have to spend another afternoon reading discussion board threads about Traditional, trying to decide whether to stick with it or not. I don't like illiquidity, and I don't like investments I don't understand, and Traditional is both. Recently my TIAA wealth advisor was trying to talk me back into it, citing the current juicy rates, and I said, "Man, you must spend about half your time trying to explain this thing to people." He admitted that was true. I don't fault anyone for using Traditional -- you'll probably make out better than I will -- but it's not for me.
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Garco
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Re: TIAA Traditional

Post by Garco »

I find myself agreeing with CREFWATCH. I've been a long-time TIAA investor (since 1975). When it came time to begin taking RMD's from my account, I decided I did not want an annuity. I rather preferred maintaining a lot of liquidity. And so I am now engaged in a process of using what TIAA calls a "Transfer Payout Annuity" to extract cash from my TIAA Traditional accumulation. A few more years of that and all of my TIAA Traditional ("Trad") will be gone.

A large majority of my invested cash is in TIAA, but at this time less than 10% of my TIAA account value remains in Trad.

I think TIAA is a good company. But that TIAA Traditional product -- no matter how "core" it has been to TIAA's presentation of itself -- is not something that I want.
MoreTaxes
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Re: TIAA Traditional

Post by MoreTaxes »

crefwatch wrote: Tue Jan 31, 2023 2:44 pm I forget the exact date, but in the 1930s, TIAA found itself unable to maintain their guaranteed rate of 4%. They borrowed money, and asked their (charitable) founding donor for more money. But they kept their promises to EVERY customer at the time. And they changed the (pay-in period) guarantee to 3% for "new money" from then on.
Yes, this is described in https://pensionresearchcouncil.wharton. ... 031670.pdf.

The pre-1936 TIAA contracts guaranteed 4%, which actuaries thought could be easily supported given the history of interest rates on bonds up to that time. After 1936, they realized their mistake and wrote more conservative contracts. But that wasn't enough. By the late 1940s, TIAA realized their obligations on the pre-1936 contracts were risking the over all survival of TIAA.

As a result, they requested an infusion from Carnegie Corporation to make the business sound. From 1948 to 1958, Carnegie Corporation gave TIAA an additional $8.75 million to apply toward losses on the old contract vintages.
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