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Subject:  Just when things were going ok, the rules change Date:  1/3/2009  8:25 PM
Author:  Mudster1 Number:  65026 of 74759

With less than a week's notice, my employer (a public school district) has informed me that I can no longer continue to invest with TIAA-CREF through my 403(b)7 (TSA) plan. I'll save the rant regarding this for elsewhere, but here is my problem, some thoughts, and my request that you evaluate the pros and cons of these ideas and perhaps give me new, hopefully better, ones.

My situation: I max my Roth IRA now, and that is divided between 2 domestic and one international mutual fund options (plus a small amount in Scottrade).

The bulk of my retirement funds are with TIAA-CREF, currently divided among bonds, real estate, a couple funds, and interest-bearing guaranteed accounts.

I am 16 years from the traditional retirement age of 65 and 20+ from the time when I will be forced to withdraw from the funds.

These investments won't be my only retirement income. If they still have Social Security, I'll get some of that, but my state has a pretty good retirement plan for public employees in which I am fully vested.

OK, enough background. Here are my options:

- Invest only after tax and not get the tax-sheltered break of pre-tax investing. I'm not crazy about this because I max my IRA already.

- Open another TSA - almost the only option my district allows under their 403(b) plans, and keep my other money in TIAA-CREF where it is doing fairly well. This would leave me with higher fees (I don't think anyone is as low as TIAA when it comes to TSA) and two accounts to deal with.

- I think I might be able to open a TSA with Vanguard under the new rules that is still a TSA, but at least I get the lower cost fund choices.

- Add to my dividend paying stock portfolio (Almost my entire portfolio is dividend payers), post-tax, and build up some dividend income.

- Subsribe to Champion Funds and buy into some of these for a few years although they would be post-tax unless I put some of my IRA money there.

-This is a subset of my problem - does it make any sense to have a bunch of smaller IRA's spread among different types of funds? It seems like it would make it difficult when the time comes for forced withdrawals, and that is a lot of paperwork to keep track of, but diversification is hard with the annuity choices my district offers.

I guess I'm looking for direction in retirement planning as I try to choose between opening another annunity (which typically have some degree of stability, but not more than a typical mutual fund and have higher costs and less choices) vs. options I may not have considered that would let me earn higher rewards with moderate to low-moderate risk tolerance.

I was comfortable with TIAA-CREF, my IRA's, my pension, SS, and my dividend portfolio. Now the govt. and district have stepped in and made it more confusing and I'm having trouble getting perspective. I can't find an active board with more teachers who have this problem, so I'm trying here. Your thoughts are appreciated.

Mudster
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