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Plot5
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No topic [was CREF STOCK R1 Alternative in Roth IRA?]

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ResearchMed
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by ResearchMed »

Plot5 wrote: Sat May 27, 2023 6:43 am The only thing he told me is that mutual fund purchases and sales are free if executed online.

Welcome to Bogleheads!

Be careful about the online transactions being free, or at least double check and get the agent's name. Or ask them to point you to where you can see this in writing.

At least in our 403b plan and also in our non-403b accounts, there are some mutual fund families where TIAA *does* charge a fee for transactions.
This is current as of a few months ago. Perhaps something changed since then?

Transactions are free online if one is working with TIAA funds.

RM
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by student »

1) Since CREF Stock is about 60% domestic and 40% international, if you decide to switch, then perhaps move to a 60% domestic index and 40% international index, if you decide to go with index funds.
2) If you are doing 1), then you can do it all at once. I am assuming you want to keep the asset allocation.
3) While CREF Stock R1 ER is not unreasonable for a non-index fund, I would likely not invest in it.
4) While I like TIAA Traditional, their equity funds are nothing special. In terms of ER, they are not competitive except for institutional index funds.
5) I don't see what TIAA Roth can offer you given that its TIAA Traditional version has a lower guaranteed rate (unless you have it from long time ago) and you still have money in your RA and GSRA.
6) You mentioned TIAA brokerage account, so I assume you can buy ETF? If so, perhaps move the money to index ETFs and maintain the asset allocation.
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by ResearchMed »

Plot5 wrote: Sat May 27, 2023 9:13 am
ResearchMed wrote: Sat May 27, 2023 8:33 am
Welcome to Bogleheads!

Be careful about the online transactions being free, or at least double check and get the agent's name. Or ask them to point you to where you can see this in writing.

At least in our 403b plan and also in our non-403b accounts, there are some mutual fund families where TIAA *does* charge a fee for transactions.

RM
Thanks for the welcome!

The account in question is not a 403b account. It is an IRA Brokerage. Maybe the rules are different for your accounts.

I found this in the brokerage FAQ on the TIAA website:
https://www.tiaa.org/public/invest/fina ... ing-orders


"For example, commissions for online stock trades have a $0 commission; however, if you are selling a foreign security, additional commission and fees apply."

In the Customer Agreement it says there are NTF Mutual Funds and non-NTF Mutual Funds. I guess I can call back and make sure the funds I want to buy are non-NTF. The agent I spoke to excluded the possibility of a fee for any online equities transaction.

I'm not sure that the costs differ for the non-403b accounts; they don't for ours. The charges are the same for TIRA, Roth IRA, and taxable accounts, at least as far as we've experienced or been told.

Howver, you specifically wrote about being told that the MUTUAL FUND transactions were free online ("The only thing he told me is that mutual fund purchases and sales are free if executed online."), and that is what I was addressing.

Nowadays, many firms have no charge for equities or even ETFs.

RM
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by crefwatch »

When I buy or sell Vanguard funds in my TIAA IRA or Roth IRA brokerage window, the fee is $35. Since I seldom trade less than $25,000, I don't care. (But I don't like it!)

Have you checked to make sure your R1 plan has no Plan Servicing Credits? That could offset ERs.
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by Laff »

I see no reason to stick with CREF in the Roth; switch to the Vanguard VTI/VXUS combo. I’m not certain, but I think moving money from the TIAA Roth wrapper to the brokerage settlement fund takes a day, so you may have to wait a couple days after your sale to buy.
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by ResearchMed »

Plot5 wrote: Sat May 27, 2023 9:35 am
ResearchMed wrote: Sat May 27, 2023 9:21 am you specifically wrote about being told that the MUTUAL FUND transactions were free online ("The only thing he told me is that mutual fund purchases and sales are free if executed online."), and that is what I was addressing.

Nowadays, many firms have no charge for equities or even ETFs.

RM

Thanks for noting this point. You are right that I should confirm specifically whether mutual fund transactions are also no-fee. I can also purchase ETF's from the brokerage account in the case that there are substantial fees for mutual fund transactions. If I initiate a purchase from the brokerage account, shouldn't any fee show up in the proposed purchase window?
[emphasis added]


Again... are you referring to *mutual funds* or ETFs/equities?

Some, but not all, of the other fund families have fees at TIAA.

Also, when you write "brokerage account", do you mean "taxable account"?
There are "brokerage windows" [sections] in our 403b accounts, and also in our TIRA and Roth IRA accounts.

I'm *not* sure whether the transaction fees show up just when one is doing the transaction. For some reason, I think it's not as obvious as it should be at that point...

But as crefwatch mentioned, the fee isn't large, and it almost disappears into rounding if one is doing large transactions. For smaller, and especially if frequent, transactions, those fees can add up.

When you click on a fund name to get "view details", there should be an indication at the top of the page. "NTF" means No Transaction Fee. I think if that is *not* there, then there probably is a transaction fee.
I happen to think it should be labeled if there IS a transaction fee.

RM
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by vtMaps »

I also did Roth conversions to an IRA at TIAA. I opened the TIAA brokerage link in order to access lower cost funds/ETFs and found the brokerage quite clunky. The final straw was trying to buy an ETF on a Veteran's Day. The stock market was open but it was a bank holiday. Apparently the brokerage sweep is a bank account so I couldn't use the settled funds in the sweep. :annoyed

The solution for me was to move the Roth IRA to Fidelity. Even that was a chore. I tried to initiate the transfer from Fidelity, but TIAA rejected it and I had to initiate it from TIAA.

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Re: CREF STOCK R1 Alternative in Roth IRA?

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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by crefwatch »

Plot5 wrote: Sat May 27, 2023 9:44 am Is the $35 fee for mutual funds or also for Eft's? I have almost never sold anything and don't know if I would feel comfortable moving a large amount at one time.

If I buy Eft's, is it better to buy whole shares? I saw there is a separate partial share agreement for purchasing whole dollar amounts.

In the Activity tab, I have seen small quarterly Service Plan Credits for my employer Cref Stock R2 and also Cref Equity Indec R2. I have never noticed any other servicing credits. Is there somewhere else I should look?
An ETF purchase in a brokerage account is fee-wise identical to buying common stock shares. Your commission may be affected by your asset level or number of trades a year, but it will be very small.

Your question about fractional ETF shares suggests that you don't yet fully understand the differences between owning a mutual fund and owning an ETF. You may also be confused by thifty Boglehead chatter on that topic. It would be a sad oversimplification to believe that all smart investors now buy only ETFs, for example. You have more non-TIAA reading to do.

Plan Servicing Credits reduce your "actual" ER for CREF VA Accounts. But they still tend to be more expensive than index ETFs. While it is tedious to figure out how much you are saving with the Plan Servicing Credits, you owe it to yourself to figure it out. Especially if you are determined to cut costs and fees.
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Re: CREF STOCK R1 Alternative in Roth IRA?

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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by crefwatch »

I am not knowledgeable about ETF's, but I am always happy to learn. What reading do you suggest?
The plan servicing credits I am receiving are very small and none on the IRA as far as I can tell from the activity page.
My impression is that online individual stocks and ETF purchases and sales have no commission in my brokerage account. This is also what I was told by the brokerage agent.

On a separate issue, I have read on this forum that people recommend total market index funds over growth funds over the long term. This has not been my experience. I purchased a little CREF Growth monthly while I was working, and it has vastly outpaced both the CREF Equity Index and also the CREF Stock, so much so that I am considering moving some of the CREF Stock into CREF Growth or TIAA CREF Growth.



I don't want to tell you how you should invest, but it seems to me that you have a few ideas but don't know the underlying "facts." This boards wiki is a good place to start,
https://www.bogleheads.org/wiki/Main_Page
and you could start by reading the pages for terms like Boglehead, index fund, growth investing, value investing, mutual fund, ETF.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds

But you betray ignorance of cognitive biases like Recency (quote above about Growth funds) and issues like Reversion to the Mean.
https://en.m.wikipedia.org/wiki/Recency_bias

You also talked about Buy And Hold, which is my general philosophy, too. [Unnecessary comment removed by admin LadyGeek] Roth conversions are fully taxed as ordinary income, so the old basis of the shares in their new home is irrelevant. You might as well sell the R1 and buy the R2 with converted cash in the Roth. You really meant (maybe?) "I am maintaining my Asset Allocation during the Roth conversion."

Overall, It seemed to me that you heard a good snippet of advice, like "use low-cost index funds" and decided to act on it in a vacuum. TIAA does not have enough low-cost options, but that does not make you a fool to use CREF Stock during one job if you have to.
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Re: CREF STOCK R1 Alternative in Roth IRA?

Post by Plot5 »

[Unnecessary comment removed by admin LadyGeek]

My husband is working abroad, so I get a foreign tax credit that allows me to make a significant Roth conversion per year tax free.
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Re: CREF STOCK R1 Alternative in Roth IRA?

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I removed some off-topic comments, a post, and a reply. The discussion was getting contentious and may be the result of a misunderstanding. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

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Re: No topic [was CREF STOCK R1 Alternative in Roth IRA?]

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The OP has removed all post content. It makes no sense to continue.

(Thread locked to end the discussion.)
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