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Subject:  Re: Variable Annuities Date:  1/15/2001  4:58 PM
Author:  Mark0Young Number:  27204 of 80008

Currently, a little more than half of my retirement is going into CREF variable annuities

I have all of my 403(b) going into TIAA-CREF's "Group Supplemental Retirement Annuity" (TIAA-CREF-speak for 403(b) plans). They seem to be a pretty decent choice: decent "investment accounts", very low M&E fees (0.005%), low investment management expenses (almost as good as Vanguard), and web access for checking one's accounts and reblancing between "investment accounts".

Now they do tend to be somewhat on the conservative side, so if one wants to pick up aggressive, or a heavier weighting in small and mid caps, one has to look elsewhere. (I have taxable investments and Roth IRA elsewhere, where I can get more small, mid, and aggressive exposure.)

Like many 403(b) providers, they offer a range of "investment accounts", some stock based, some bond based, a real estate account, a "traditional annuity" account, and a money market account. (See and click on "Retirement accounts" near the top of the page for the list of investment options.) For the long term, the stock-based investment options generally produce better long-term returns. TIAA-CREF also has an asset allocation questionaire on their site to help suggest a mix of investment accounts.

Of the 403(b) providers available through my employer, TIAA-CREF is the best one--the other options are either much more expensive insurance companies, or load funds.

I've heard that Annuities are a bad idea for retirement . Do variable annuities share the problems with annuities?

There are several problems with typical annuities:

1. Annuities are insurance co