Anyone know a good source for outside perspective on TIAA-CREF?

[Zenlitened]

I was hoping to find something kind of like a "TIAA-CREF for Dummies," though preferably a notch or two above that level.

Unfortunately, the only thing I've seen is a book published in 2001 -- half a decade ago!

http://www.amazon.com/exec/obidos/ASIN/0195131975/dealtime-books-20/ref=nosim

I think I've read most of the pertinent materials on the TIAA-CREF site, but I'm hoping to get some insights from sources NOT on the payroll of their marketing department! :D

Thanks!

[A HERETIC I AM]

1. Try this...

http://search.morningstar.com/MstarSrch/MstarSrch2.aspx?pgid=hetopsearch

Articles there. hope it is informative

[Zenlitened]

2. Good stuff -- thanks!

A lot of the articles confirm what I kind of suspected. The returns on the CREF funds can be pretty weak, while the fees aren't as low as one is led to believe.

And I'm still grappling with the whole idea of an annuity. "Guaranteed income for life" seems to carry quite a price-tag, too. This whole system of "vintages" for calculating interest based on contribution date. Huh? Is that just another way of saying "No compound interest for you"??? Here in the age of the Roth IRA, it all seems a bit antiquated, not to mention arcane.

Thanks for pointing me toward the site! :hi:

[A HERETIC I AM]

3. While basic, this Wikipedia page has some useful and accurate info

http://en.wikipedia.org/wiki/Annuity_%28US_financial_products%29

Here is a page from the Securities and Exchange Commission website that may help explain as well.
http://www.sec.gov/answers/annuity.htm


Annuities are essentially Insurance products. They fall under the realm of securities (and as a consequence, require the seller to be licensed differently) when a portion of the risk involved in the underlying investments is transferred to the Annuitant (You, as the case may be) such as in a variable annuity. In other words, a stream of income is agreed upon in the contract but the amount of the income can vary depending on the performance of the underlying instruments or securities (Stocks, Bonds, Mutual Funds, Etc.)

The biggest difference between an annuity and say your Roth IRA is that an annuity can and often does come with a death benefit. Essentially the Insurance end of things. You can get a guaranteed income for life and when you die your spouse or heirs get a payout, just like a regular life insurance policy.

Hope that helps.

[Zenlitened]

5. Thanks. I think that's one of the decisons I have to make:

Whether the guaranteed lifetime income idea ought to be a part of my portfolio. And just how good any "guarantee" is these days.

TIAA CREF has a very strong reputation, but it just seems the world is changing around us in major ways, and I wonder how this model will hold up in the years to come.

:hi:

[scruffy]

4. Here is what I know from working with them on behalf of clients . . .

First of all, TIAA/CREF is difficult to work with. You can reach them by contacting their call center, but you are never able to get the same person twice. Rarely have I gotten the same answer twice, either. When I have managed to reach someone who appears to know what they are talking about, I'm never able to find them again.

There are usually two parts to a TIAA/CREF contract, although you do not have to participate in both of them. The TIAA portion offers a principal guarantee - essentially a money market account with slightly higher returns. The CREF portion offers a money market and equity funds. The problem comes when you want to talk your money OUT of the plan - say when you leave your job and want to roll the contract over into an outside IRA. Under most contracts (probably ALL of their contracts, but I don't know that for sure), you can only roll over the TIAA portion over a 9 or 10 year period. So if you have $50,000 in the TIAA portion and you want to roll it into an IRA, it will take 10 years to accomplish. That bothers me tremendously!

Most of the contracts allow the CREF portion to be rolled over all at once.

As far as the death benefit with a variable annuity is concerned, what that means is if you make contributions to the annuity and the market drops so the annuity is worth less than what you contributed to it . . . if you happen to die right around that time, your beneficiary will receive as a death benefit the amount you put in, even if the market value is less. So if you contribute $25,000, the market drops and the annuity is now worth $20,000 . .. if you die your beneficiary will get the $25,000 that you initially put in. There are other types of payouts with variable annuities, and they all have fees associated with them, but when someone talks about the guaranteed death benefit, that is what they usually are referring to.

When I see people come to my office with TIAA/CREF contracts, my first reaction is to cringe and determine what we can do to get them OUT of it.

[Zenlitened]

6. "... My first reaction is to cringe..." LOL!

I've had a lot of cringe-y moments lately too, as I read up and try to educate myself about TIAA CREF!

I just received that book I mentioned in my OP (bought it used for less than $10, as opposed to $35 for "new" -- gotta keep ALL investing "fees" as low as possible, right?) :)

Anyway, the front cover has a big bold disclaimer: This book has not been prepared, approved, or licensed by TIAA CREF or any affiliated organization.

That's definitely a point in their favor, IMO. Even though the book is five years old, I think it will have some good, basic info to fill in the gaps in my knowledge. I suspect that my strategy will become one of making the best use of pre-tax retirement contributions and employer match, but in a way that gives me maximum flexibility to take my $$$ elsewhere.

I definitely agree you're right about their phone center: answers given completely unreliable. As for the documents provided to subscribers, and even the HR office... they're pretty much devoid of any real facts, too. When I'm reading a copy of my employer's plan, I really don't expect to see numerous sentences telling me "refer to your employer's plan" for actual details. :eyes:

Ugh. So... I'm drawing up a list of questions to mail in, hoping to get something definitive in writing.

Thanks for sharing your perspective! :hi: