Tiaa-Cref: rolling it over?

[lookingforchange]

Hi everyone,

I was laid off from my university as part of a 'reduction in force' and I do not intend to pursue a job in academia anymore.

I was told by a friend who is a financial advisor to roll over my Tiaa-cref retirement contribution to another company like Fidelity because Tiaa-cref charges high fees. After over a decade in academia, I never knew that and I never heard my colleagues talk about it. I did some research online, and the articles I read are older (6 to 7 years) but they do confirm my friend's comment. Are all the Tiaa-cref retirement accounts for university faculty equal?

I have other accounts with Fidelity so I am thinking I would be moving my retirement contributions over to them.

[lightning]

So sorry to hear about the reduction in work force at your institution. If lower fees are what you seek, you should look into Vanguard.

[spork]

Please don't create multiple threads on the same topic in different parts of the fora.

[mamselle]

Please don't create multiple threads on the same topic in different parts of the fora.

Agreed. I put a note in to the mods on a parallel thread.

M.

[clean]

Vanguard, as a company, has a history of keeping investment expenses in its mutual funds lower than most other companies. The expenses are lower because Vanguard fund managers tend to hold investments longer than other companies, saving on sales charges and capital gains. According to InvestmentNews, Vanguard equity funds have an average expense ratio of 0.18 percent, which is 82 percent below the industry average. TIAA's expense ratios range from 1.34 percent, to merely 0.05 percent on the lowest fee funds.

https://pocketsense.com/comparison-vanguard-tiaacref-8668953.html


Given this, I would think that it depends on your investments.  If you decide to stay with TIAA, then be sure to move to the lowest fees available in the vast array of choices. 

How old are you?

Please check the "Rule of 55" which would allow you to access retirement account from your final employer without penalty if your employment ended and you are 55.  IF you move the money, you wont be able to access this money until 59 1/2.

https://www.fool.com/retirement/plans/401k/rule-of-55/

[Cheerful]

I have other accounts with Fidelity so I am thinking I would be moving my retirement contributions over to them.

Sorry about the "RIF." Wishing you the best for your new path.

Yes, you can do a rollover.  Becomes an IRA at new company.  Many people prefer to consolidate their portfolio rather than having many different accounts with many companies.  I rolled over TIAA funds from prior employers to another company, went smoothly.  Contact the company to which you want to roll over the funds for assistance first -- they have the most interest in helping since you are bringing new money.  Fidelity is well-regarded. 

If you have any TIAA Traditional, the excellent guaranteed interest account, check the rules and consider what's best.  The ORP version must be withdrawn over 10 years.  The supplemental employee-only version can be withdrawn in lump sum.  Check rules re: TIAA, age, and job exit.

[lookingforchange]

Sorry for posting in two areas! I realized in the first case that it was probably not the right area and I had no option to erase it... I figured the moderator would pick it up right away since I had the exact same title. Sorry for the inconvenience.

And thank you for the responses! I appreciate them.

[Hibush]

If you have any TIAA Traditional, the excellent guaranteed interest account, check the rules and consider what's best.  The ORP version must be withdrawn over 10 years.  The supplemental employee-only version can be withdrawn in lump sum.  Check rules re: TIAA, age, and job exit.

The TIAA Traditional is completely different from all the other investment options from TIAA-CREF. It is designed for putting money in and leaving it there until you retire. At that point you turn it into an annuity that pays monthly installments, usually for the rest of your life but you can chose other options.

The rules make following that pattern very beneficial, but they really punish you for trying to do anything else. The intentional benefit is that the return is good because turnover is so low and predictable.

If you have money specifically in TIAA Traditional, you are likely best off by leaving it there until you retire. Think of it as an old-time retirement plan.

[lookingforchange]

I do not have any Tiaa Traditional. I have Vanguards, Cref-Equity, Tiaa-Cref Lifecycle Funds and Ishare S&P 500. I assume that I should look a little more closely at the fees to compare and contrast...

[arcturus]

Sorry to hear about the RIF.

The expenses for TIAA funds vary by employer and it can be quite difficult to parse the actual impact of the expenses on your return on investment for the various CREF funds. TIAA traditional is particularly opaque (guaranteed minimum returns, but often higher than specified based on how long you have been invested...), but is usually viewed as an excellent long term investment that can be, but does not have to be, annuitized (where it acts like an old-school pension in some ways). The CREF funds can also be annuitized, which make them different than your classic investment options at other firms.

I, personally, am keeping my TIAA account specifically to have access to TIAA traditional, as it is a unique product. However, if you have no interest in TIAA traditional, or in the CREF funds, it may be easier to consolidate your investments at a different brokerage. Keep in mind, however, that having a rollover IRA, with pre-tax funds, will make you subject to the pro-rata rule if you need to use the backdoor process to contribute to a Roth IRA (due to income limits) now or in the future.

[downer]

If you have a sizeable amount of money in TIAA, I'm sure that your advisor at Fidelity would be more than willing to set out the info you want. And your advisor at TIAA would also be likely to set out whatever info you want to make their services appealing to you. They will do all the research for you. Their advice might not be entirely neutral, but they are keen to get your business.

[clean]

I do not have any Tiaa Traditional. I have Vanguards, Cref-Equity, Tiaa-Cref Lifecycle Funds and Ishare S&P 500. I assume that I should look a little more closely at the fees to compare and contrast...

Yes, do that research first.  In fact, you may be able to ask the potential new advisor to do those comparisons for you and explain the cost structures and the differences between the plans! 

Also, if you find that TIAA offers similar products THAT FIT your retirement plan needs/goals that have lower fees you can reallocate what you have in there already to the lower fee products.

While having multiple retirement accounts may be a headache, sometimes, for managing your money, It does provide additional options that you may be able to take advantage of using.

[Hibush]

I do not have any Tiaa Traditional. I have Vanguards, Cref-Equity, Tiaa-Cref Lifecycle Funds and Ishare S&P 500. I assume that I should look a little more closely at the fees to compare and contrast...

Then you just have a variety of tradable equities. Might as well have them all in a single brokerage account. That makes it easier to develop a portfolio that matches you needs and minimize redundant duplication.

[lookingforchange]

I do not have any Tiaa Traditional. I have Vanguards, Cref-Equity, Tiaa-Cref Lifecycle Funds and Ishare S&P 500. I assume that I should look a little more closely at the fees to compare and contrast...

Then you just have a variety of tradable equities. Might as well have them all in a single brokerage account. That makes it easier to develop a portfolio that matches you needs and minimize redundant duplication.

All allocations mentioned above are within Tiaa- Cref. I am not sure if that was clear...

Thanks everyone. You are raising some good points that I will be sure to bring up with my advisors. I have meetings with both (Tiaa advisor and FIdelity advisor). I appreciate your input!