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Need Help With Retirement Options (Investing) [TIAA-CREF]

Discussion in 'BBS Hangout' started by Lil Pun, Jan 11, 2008.

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  1. Lil Pun

    Lil Pun Contributing Member

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    Started my new job this week and they have the TIAA-CREF option for their retirement plan. It is a retirement plan which has two investment options. Option A is selecting one of several options that TIAA-CREF has already setup. Option B is selecting where I want my money invested and I can select from several options there also.

    Option A:

    You choose the TIAA-CREF Lifecycle Fund which is closest to your estimated year of retirement. Mine would most likely be the TIAA-CREF Lifecycle Fund 2040 which has an initial target of 80% Equity and 20% Non-equity. That is the latest Lifecycle Fund and I should be 60 by that year (assuming I am still alive at all). The Funds then start to decrease by 5 years after that such as 2035, 2030, etc. and the equity decreases by 5% and the non-equity increases by 5%.

    Option B:

    You can build your own portfolio with retirement accounts and funds that they have specified. You can select up to 10 of these accounts and split the percentage among those accounts anyway you wish as long as they are whole numbers. So, as an example, I could do CREF Equity Index Account at 75%, TIAA-CREF Mid-Cap Value Fund at 20%, and TIAA Real Estate Account at 5%. I could also select 10 different account and split them with 10% each or I could mix and match a number of other ways. Here are those funds and accounts:

    EQUITIES:
    Variable Annuity:
    CREF Equity Index Account
    CREF Global Equities Account
    CREF Growth Account
    CREF Stock Account
    Mutual Fund:
    TIAA-CREF International Equity Index Fund
    TIAA-CREF Large-Cap Value Index Fund
    TIAA-CREF Mid-Cap Blend Index Fund
    TIAA-CREF Mid-Cap Growth Fund
    TIAA-CREF Mid-Cap Value Fund
    TIAA-CREF S&P 500 Index Fund
    TIAA-CREF Small-Cap Blend Index Fund

    REAL ESTATE:
    Variable Annuity:
    TIAA Real Estate Account

    FIXED INCOME:
    Variable Annuity:
    CREF Bond Market Account
    CREF Inflation-Linked Bond Account

    MONEY MARKET:
    Variable Annuity:
    CREF Money Market Account

    GUARANTEED:
    Guaranteed Annuity:
    TIAA Traditional Account

    MULTI-ASSET:
    Variable Annuity:
    CREF Social Choice Account

    Mutual Fund:
    TIAA-CREF Lifecycle Fund 2010
    TIAA-CREF Lifecycle Fund 2015
    TIAA-CREF Lifecycle Fund 2020
    TIAA-CREF Lifecycle Fund 2025
    TIAA-CREF Lifecycle Fund 2030
    TIAA-CREF Lifecycle Fund 2035
    TIAA-CREF Lifecycle Fund 2040


    What I am needing assistance on is how to do this. Should I select one of their pre-defined accounts or should I build my own portfolio. If I build my own portfolio, which accounts look like good ones to invest in? Just looking for advice and suggestions and I know there are a few of you on here that are familiar with investing so hopefully I will get some assistance. Thanks in advance.
     
    #1 Lil Pun, Jan 11, 2008
  2. ima_drummer2k

    ima_drummer2k Contributing Member

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    I am BY NO MEANS an expert and you will probably get better advice from other people here, but...

    I would build my own and pick about 5 funds that have the lowest expense ratios. Make sure one of them is the S&P index fund, can't go wrong with that one.

    Then, contribute as much as you can afford to (if not more) and watch it grow.

    Congrats on the job, BTW.
     
    #2 ima_drummer2k, Jan 11, 2008
  3. SwoLy-D

    SwoLy-D Contributing Member

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    So... does this mean you'll no longer be asking us computer-related questions, Señor Pun? :(

    Does anyone giggle just a bit when they see "Last edited by: your mom" under a post like I chuckle often?!? Gets me every time. :D
     
    #3 SwoLy-D, Jan 11, 2008
  4. TheyCallmeExMan

    TheyCallmeExMan Member

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    i handle the 401 k for the ppl at my work. Just speaking in general, it just depends on how involve u want to be. if ur the one to keep up with the market and want more control then u should pick ur own, but if u dont really plan to keep up with it nor dont have a full understanding of it then u should just let them handle it. Quick question, are u able to switch from one option to another at a later date?
     
    #4 TheyCallmeExMan, Jan 11, 2008
  5. Lil Pun

    Lil Pun Contributing Member

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    Man, give me credit. I have not asked computer related questions in a while. I actually switched my major and graduated with a degree in Computer & Information Technology last month. :eek: :D I just do as R2K has told me in the past, K.I.S.S. (Keep It Simple Stupid) and I have learned to think outside the box as I interned at two hospital over the past 6 months as well. I doubt you will see too many more of those types of questions from me but never say never. ;)
     
    #5 Lil Pun, Jan 11, 2008
  6. Lil Pun

    Lil Pun Contributing Member

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    Thanks a lot. I was definitely wanting to build my own but just unsure about this type of stuff. If it were you, and you picked 5 of the accounts that have low expense ratios, how would YOU divide them up? 20% each? 50%, 25%, 25%? What would you do?
     
    #6 Lil Pun, Jan 11, 2008
  7. lost_elephant

    lost_elephant Contributing Member

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    Target Date funds typically do a decent job. They are a bit risk-averse (rightfully so). If you are young, I wouldn't go for this since your target date is 20% fixed income.

    I would look at the mutual funds rather than variable annuities, mutual funds are easier to keep track of with regard to expenses, rather than var. annuities which are composed of wrap fees.
     
    #7 lost_elephant, Jan 11, 2008
  8. SwoLy-D

    SwoLy-D Contributing Member

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    Oh, no... I liked assisting you with some of those questions. Never did one sound like you weren't close to a solution. They were all challenging, as well. You get all credit from me, brother.

    Well? Are you still gonna be doing computer-related stuff, or what will you be doing now?

    I am learning about investment through your thread. 3 1/2 stars :eek:
     
    #8 SwoLy-D, Jan 11, 2008
  9. Lil Pun

    Lil Pun Contributing Member

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    Actually when I graduated from school, the school I graduated from (Arkansas State University) offered me a job as an Assistant Registrar. I am basically supervising 3-4 people and am over the Transcripts section. Along with the I provide technical support, aling with 2 others, to the Registrar's Office.
     
    #9 Lil Pun, Jan 11, 2008
  10. pirc1

    pirc1 Contributing Member

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    The big money is "sort of" is the registar position.
     
    #10 pirc1, Jan 11, 2008
  11. Dave2000

    Dave2000 Contributing Member

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    out of curiosity, how much of a percentage do you contribute and how much does your company match? At first I did 8%, then raised it to 10%, and now I am currently doing 15% and my company matches 6%, I've been with my current company for 1 1/2 and its pretty good so far :)
     
    #11 Dave2000, Jan 11, 2008
  12. Lil Pun

    Lil Pun Contributing Member

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    Well my company matches 10% and I am doing 6% just to start off. I really want to see what type of money I am making with all of my deductions before I go any higher than that. I currently have about $30 deducted per pay check for benefits that include health, dental, and vision.
     
    #12 Lil Pun, Jan 11, 2008
  13. ima_drummer2k

    ima_drummer2k Contributing Member

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    I do 20% each, but one of my funds is a money market, so I recently changed it to 10% and put the other 10% in the S&P fund.

    EDIT: Damn, your company matches 10%?? I would contribute what they match without question. That's pretty high, I think - may as well take advantage. It's free money! It's like giving yourself a 10% raise. Who wouldn't do that?

    I contribute 15% (I'm weird like that) and my company matches 6%. I thought that was good until I saw that 10%.

    Seriously, you've GOT to get that match. After your first few paychecks, you won't even notice. Then after just a few years, you'll have a nice little nest egg, seemingly from thin air.
     
    #13 ima_drummer2k, Jan 11, 2008
    Last edited: Jan 11, 2008
  14. Dave2000

    Dave2000 Contributing Member

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    i would do at least what the company matches, if you do the deductions before taxes, you won't notice much of a difference at all.
     
    #14 Dave2000, Jan 11, 2008
  15. Rockets Red Glare

    Rockets Red Glare Contributing Member

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    I would really try to do the 10%, you are just leaving 4% on the table.
     
    #15 Rockets Red Glare, Jan 11, 2008
  16. Lil Pun

    Lil Pun Contributing Member

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    OK, I read my papers wrong. As long as I contribute at least 6%, my company will contribute 10% on my behalf.

    I thought 6% was the minimum I could contribute and my company still match my percentage but I was wrong.
     
    #16 Lil Pun, Jan 11, 2008
  17. thelasik

    thelasik Contributing Member

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    Damn thats a sweet deal.
     
    #17 thelasik, Jan 11, 2008
  18. ima_drummer2k

    ima_drummer2k Contributing Member

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    So your company contributes MORE than you??

    Man, that must be nice.
     
    #18 ima_drummer2k, Jan 11, 2008
  19. The Real Shady

    The Real Shady Contributing Member

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    10% is a sick amount. That's awesome.
     
    #19 The Real Shady, Jan 11, 2008
  20. MrWhite

    MrWhite Member

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    That is an excellent situation to be in, congrats.

    Drummer's advice is spot on for a beginner, if you're going to manage things on your own, be wary of the expense ratios.

    As a side note, I would recommend opening a Roth IRA on your own. It sounds like you're young, so this type of account would most likely be very beneficial to you.
     
    #20 MrWhite, Jan 11, 2008
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