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I'm married, 64 y/o, semi-retired and will be fully retired on June 30, 2014. By that time, I will have approx $950K in a TIAA (100 percent Treasuries) account. We have no debt -- nada -- and another $800K in a Schwab account: a mix of stocks, a couple of T-bonds, bond ETFs (TIPs, munis, Schwab SCHZ aggregate US bond fund), and too much cash. And approx $100K in the credit union.

I feel very blessed by all this (having started from zero). But I am also feeling more than a little daunted by what to do now. I plan to talk with the TIAA-CREF advisor and with my Schwab guy. But I am reaching out to you bond folks for your advice so that I have at least half a clue when I go to talk with them.

I am (probably excessively) conservative about money, having grown up poor and having fended for myself for a good part of my life. A lot of the Schwab cash was in CDs, purchased in those bygone days when one could actually get 5 percent or so on them. But those are now all history, and the cash just sits there, earning 0.1 percent or whatever.

The idea of a TIAA annuity that pays out, like 3 percent/year, has little appeal to me, although I suppose that some piece of the $950K could go to that.

Grateful for any advice,
Fungi
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Fungi,

The biggest choice facing you is whether to entrust the management of those assets to a competent money manger (assuming you can find one), or to continue to trust yourself to muddle along quite nicely.

Yeah, from one point of view, you aren't deploying those assets to their maximum potential. OTOH --and far more importantly-- you are "anti-fragile" (in Taleb's term), and that's where I'd suggest your begin your journey. Get a hold of his most recent book (linked below) and work your way through it. Your takeaway will be a framework for dealing with 'risk' (which cannot be predicted, only managed).

In further words, deciding on your high-level strategy needs to come first. Later, much later, you can worry about the low-level tactical details, like, what to buy (or not) with some of that cash.

Charlie
--------------------------

http://www.amazon.com/Antifragile-Things-That-Gain-Disorder/...
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One thing to verify with TIAA CREF, make sure your investments are not in their "Traditional" and indeed are in the Treasuries account. If it is the Traditional account, many of those older policies have a 10 year withdrawal period that you cannot circumvent.
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Assuming you're goal is to get income....

It seems to me right now preferred stocks are offering much better risk-adjusted yields than bonds of the same credit-worthiness.

Preferreds are a step down from bonds if the company gets into financial difficulties. But they are a step up from dividend paying common shares, in that the preferred dividends must be paid first before the common shares.

There are some funds that hold preferred shares only, and spread out your risk. The one I own is PFF (maybe its PPF??), last time I looked it was yielding over 6%. I suspect a collection of bonds from those same companies that are in PFF would be yielding much less. But maybe I'm wrong. Someone else can do the math.
You can also sell call options against the shares of PFF that you own, for additional income.

I only own one individual preferred, issued by NLY, been paying me a very nice dividend since 2004.

As far as grandkids, or kids if you got going on that very late in life....they don't need to have a W-2 in order to have a Roth IRA. If you grandchild is 12, 13, 14, and maybe made $500 raking leaves, etc...you can always get them set up with a Roth IRA. You probably don't want to say your two-year old made $6,000 plowing driveways last winter.
Brokers like Schwab may have some incentive in directing clients to specific mutual funds through sales charges...aren't they called 12-b charges, or something like that??
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the most important objective at this stage of the game is to maintain the preservation of your principal capital while driving a income stream to help fulfill your expenses.

unfortunately this is one of the worst times to put new money to work with respect to investment grade investments. across the entire rainbow of fixed income, including preferreds, every asset and class is trading at insane premiums. i was looking at a bunch of preferreds last week and noticing lows in the $20 or $22 range and now 52 or 104 weeks later, they are trading at $26, $27 and some even higher. the greater the asset credit quality with higher interest rate, the greater the current market price. there are preferreds trading in the $30+ price range.

eventually the current interest rate trend will reverse which will ultimately drive down current asset values. a guaranteed 3% rate of return in this environment for investment grade assets is actually nothing to sneeze at.

if i were you, my strategy would be putting forth a signifcant allocation towards an 18 month or so time horizion. you can pick up some really great high quality investment grade corps right now with 2015 redemptions in the 1.5%-1.9% range.

in other words, let the current cycle play itself out for now. why buy a mutual fund or whatever that gives you a 5% yield but in 24 months or less, you could potentially take a double digit paper loss hit on the principal investment.

one other specific area you should explore are floating rate type assets. met life offers a preferred share A class that has a guaranteed minimum 4% annual pay out, but as interest rates rise, so does the payout on this asset. which means, unlike most other preferred stocks that will go down in price as interest rates rise, this floating rate share of met life will buck the trend.

there is also another floating rate exchange traded asset from AT&T that has bonds as the underlying, with ticker symbol GYC. however this has a redemption date of 20 something years from now, so might not suit your specific scenario.

the only type of mutual funds i would consider at this stage of the game if you had too, would be one that has an allocation for both long and short positions in bonds. otherwise if you take a net long position in any fixed income asset or class, it is simply not worth the risk reward here at this stage of the cycle.

remember we have had a rally now in corps for 4+ years. i recall selling in 2011 a bunch of zero coupon strips for a ridiculous price vs. where i bought them in 2009. you should see what they are trading at now.

think in terms of the nasdaq rally. would you have wanted to put new money to work in 1999? 1996 would have probably worked out a little better. kind of a similar theme right now in corps and other bonds.
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Much useful stuff to ponder. Thank you all. A few quick followups:

1. Agree, very much: figure out the strategic direction first and then work out tactical details later. Strategy is oriented towards reliable income stream, preserving capital, and setting up some sort of scholarship fund for our first grandchild, expected in March.

2. Yes, it is TIAA "Traditional." I misspoke. And it does have a payout calendar, although I need to check the details on that. (I started this back in 1975.) Maybe keeping a portion of it in a TIAA annuity will make sense after all.

3. I will be sure to question my Schwab guy about whether he gets compensated for steering me toward any particular funds.

4. I do own some REIT preferreds. I used to own PFF (and also a Nuveen preferred fund), but the extreme volatility in them a few years ago (esp. the leveraged Nuveen) scared me away and into indiv. issues with less volatility. I shop around among REIT preferreds pretty regularly, with help from the very smart folks on the TMF REIT board.

5. Absolutely agree: it is an awful time to put money to work, hence my dilemma. I stand at the plate with my bat on my shoulder waiting for the right pitch. And wait and wait.

6. I will educate myself about floating rate exchange traded assets, incl. GYC. Right now, the only floating rate asset I own (if this even qualifies as such, as I understand it) is TIPs.

Again, thanks very much.
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3. I will be sure to question my Schwab guy about whether he gets compensated for steering me toward any particular funds.

Fungi,

I'd humbly suggest that's the least important question to ask any potential adviser. Instead, ask him (or her) this:

"Can you support yourself trading for your own account?" (where 'trading' is just a generic, morally-neutral word that includes all forms of 'investing' as well.) In other words, "Do you eat your own cooking?"

Never trust the advice of an "adviser" who isn't actively engaging markets and who isn't putting his or her own money at risk. Why? Because 99% of "advisers" believe what their business school profs told them, and 99% of those profs don't trade, either, or when they are put in charge of managing money, they blow up the account, as the idiots, Scholes and Merton, did at Long Term Capital Management and every other fund anyone is dumb enough to let an academic get hold of or have any part of. Not a one of them understands how to manage risk, nor do they care, because it isn't their money. When things do blow up, as they always do, the "advisers" all say, to a man or a woman, "Well, no one could have foreseen that".

BRRZZP! Wrong answer and excuse. Managing risk isn't about prediction. It's about not doing stupid things in the first place. You really do need to read Taleb, who shows Modern Portfolio Theory [sic] to be the fraud and charlatanism it is.

Charlie
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2. Yes, it is TIAA "Traditional." I misspoke. And it does have a payout calendar, although I need to check the details on that. (I started this back in 1975.) Maybe keeping a portion of it in a TIAA annuity will make sense after all.

You may not have a choice. The TIAA Tradition is not like an annuity where you can simply pay a surrender charge and get out early. If you are in the 'wrong' traditional account, there is simply no way around the 10 year withdrawal period.*

*It is actually 9 years and some number of days because of how they let you take money out, but basically no more than 10% withdrawal per year.

5. Absolutely agree: it is an awful time to put money to work, hence my dilemma. I stand at the plate with my bat on my shoulder waiting for the right pitch. And wait and wait.

If nothing else, absolutely get started on withdrawing from the TIAA Traditional. Get your 10% out while you decide what to do with that portion. No reason to delay that 10 year clock.
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"Can you support yourself trading for your own account?"

I fail to see the relevance of this. Do you mean trading from/in your own account or something else?

How an advisor would recommend a client invest should not be based on how they are investing. There are different risk tolerances, timelines, and uses for the monies. It is fair to assume that their advisor might be more personally aggressive than how they would recommend the OP invest.

If you mean to say they should be able to financially support themselves from the profit from their own account, again, that does not seem relevant.
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Hi Fungi!

My best advice is that the man with a plan usually wins ( assuming a decent plan ) ;-)

My approach ( ignore the title regarding "younger investors", since the pricnciples of creating a plan and then developing a least risk way to achieve it applies to all; of course, my particular plan/strategies may be all wrong for you/others):

http://boards.fool.com/hi-mattyfatbags-here-is-a-copy-of-a-r...

Cheers!
Murph
Home Fool
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Hawk,

If an adviser can't support himself from his own investing/trading, then then he is supporting himself from the fees assessed clients (directly or indirectly. That's an agency conflict.

I've interviewed dozens of advisers. Within two minutes, it was obvious they were reading from someone else's playbook, not speaking from their own, in-the-trenches experiences, with this exception. Those who had a passion for markets and who were pulling good money out of them were exactly the ones who were most able to offer a client good advice.

YMMV, of course. But that's the touchstone I'd suggest anyone use.

Charlie
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< If nothing else, absolutely get started on withdrawing from the TIAA Traditional. Get your 10% out while you decide what to do with that portion. No reason to delay that 10 year clock. >

Agreed. I'll get going on this pronto. Better late than never.

Also...

I will read the Taleb book. And I've downloaded TMF Murph's post.

I am researching FLOT as a place to park some cash.

There are a number of "bond-like" equities with some long-term growth potential that may be worthwhile investments for my Schwab account, e.g., INTC, MSFT, VZ. I'll wait for their upcoming Q reports.

These finer-grained actions are moving me out of my non-decision paralysis, which is useful. But I fully get the message that an overall plan is the priority.

Many thanks.
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...I fully get the message that an overall plan is the priority.

And it's not just a plan, or a good plan, but plan --however imperfect-- that matches up with who you are, with your temperament and personality. That's the one you will win with, because you're likely to stick with it.
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Just a quick followup, to show that I am acting on advice that the good folks here have provided:

I spent the weekend researching various TIAA-CREF and Vanguard offerings (which are offered within TIAA-CREF) and spoke with two TIAA advisors on the phone today.

It turns out that (per my university's rules) I cannot begin reallocating any of my TIAA-Traditional until I actually retire (on June 30, 2014). But I can, at least, stop allocating new money there ... which is what I will do right away.

The problem for me, of course, is where to put the retirement contributions going forward? What a crappy environment in which to put new money to work....

More homework to do, I guess. I've downloaded a bunch of prospectuses (prospecti?) to peruse.

The other thing I did was take a little quiz that then suggests to you a portfolio based on your answers (regarding risk appetite, time horizon, objectives, etc.). The Magic 8-Ball tells me, approximately: 20% guaranteed (which I guess means "annuity"), 20% fixed-income (i.e., "bonds"), 10% real estate ("REITs"), and 50% equities. Sounds not unreasonable.

TIAA-CREF also offers "personal investment management" services for accounts > $1 M., which I will consider. It may be pound-foolish for me to resist the approx. $15K or so per annum in fees that this would cost me, esp. since I suspect that I will need help with Trusts and whatnot. But I score 11 on a 1 to 10 self-reliance scale (which I do NOT regard as an unalloyed good thing), and so it will take some convincing for me to go that route.

Fungi
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Fungi,

If you don't want to be actively engaged in managing your assets, then pay the fees and get with the rest of your life without a regret or glance back. It's just money, and one's time and sanity are far more important.

OTOH, what some smart people advise even those who prefer to have someone else manage their money is to carve out a reasonable grub stake for oneself and then try to put it to work just for the gaining the sort of real world experience that enables you to better understand what your main adviser is saying and how he/she is making decisions for you.

Charlie
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Fungi,

When you retire can you roll over your money into Vanguard?

you'd be a lot better off.....

...and if you are not going to trade bonds you need to skip them altogether as a long term position......you will only lose money against inflation and further yield hikes.....if yields rise you will lose principle with a long term hold......bonds bad....

as for equities they offer good dividends to replace income....you and I need a good market crash/retreat to get an entry....and early 2014 is just on time....the train should leave the station at any time now for Jan. 2014.....Vanguard's Admiral Funds...in particular the 0506 value fund has very low fees......very very low fees....and a higher dividend yield than the average low fee value fund......you invest in $10k units.....

then hold for good......we wont be out of the bear market for a few years, but the value fund would bounce back a good 50% or more with an increase in dividends
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< ...if yields rise you will lose principle with a long term hold......bonds bad.>

Even floaters? I own some FLOT.

I also own: CUSIP:912810ED6 US TREAS BOND 8.125%8/19 DUE 08/15/19, which I was planning to hold to maturity (deo volente).
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I also own: CUSIP:912810ED6 US TREAS BOND 8.125%8/19 DUE 08/15/19, which I was planning to hold to maturity (deo volente).

Fungi,

Nice position. http://cxa.gtm.idmanagedsolutions.com/finra/BondCenter/BondD...

If you hold to maturity, you'll sacrifice 'time-premium'. Run the numbers. Would it be better for your account to continue to collect the coupon, or to flip and capture cap-gains?

Charlie
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<Would it be better for your account to continue to collect the coupon, or to flip and capture cap-gains?>

But then what do I do with the cap gains? I already have cash coming out of my ears. I know: that's a problem a lot of folks would love to have. But it's a problem, nonetheless.

I'm not a bond trader, not that there's anything wrong with that. I'm just trying to construct a portfolio that generates sufficient income for my wife and me to live comfortably, support a couple of charitable orgs I work with, and leave a few bucks for the kid and grandkid-to-be.

That would have been relatively easy before the banksters took down the world. Now, not so easy.
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That would have been relatively easy before the banksters took down the world. Now, not so easy.

Fungi,

not so fast. If you invested in late 1999 you'd be a lot closer to broke.

You might want to invest at the lows and sell at the tops. Bonds are more than likely topping out now. And a hold to 2019 will definitely be past the top.

Lets say for the sake of argument a couple with a million dollars invests it into the bond market today. They buy 30 year treasuries. The couple's age for the sake of argument is 65 years old each. They plan to hold the bonds for the thirty years into maturity.

What will happen? Yields will rise. And inflation will rise. So each coupon will become worth less and less. And the premium will disappear. And if sold in an emergency before maturity the bonds will be discounted. In other words to discount a bond is to sell it for less than it was bought for or below the face value.

Any trading of bonds.....note I did not say any bond trader.....can face death from here of a thousand cuts.....or a large loss a several years out from discounting and inflation......

never mind the coupons being tiny and taxed.

Dave
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Fungi,

BTW the rough rough math on discounting.....

if you have a bond with a five percent coupon and yields in the market place rise to ten percent......the face value of our bond is knocked down for the remaining years to maturity by five percent compounded per year.......basically the selling bond holder has to make up the difference in the market place......

I fully know that math is not the formula.....but it gives you a picture of what can happen......

also the bond market is more volatile than the equity markets over time.....

Dave
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..the face value of our bond is knocked down for the remaining years to maturity by five percent compounded per year.......basically the selling bond holder has to make up the difference in the market place......


I unclearly meant that this was predicated upon wanting to sell the bond before maturity....

Dave
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Fungi,

Until you run the numbers, you don't know if you're making a rational choice, not that you have to make rational choices, and most investors don't. They do what "feels right", which is also a choice they can make. Sometimes that works out. But it is also indefensible. Run the numbers and then decide what to do. Don't just make gut-driven, emotion-driven guesses. Lay out the alternatives in enough detail that they really are choices --not just vague fears-- and then choose.

And I'm not giving you any advice I don't follow myself. Unlike some who hang out in this forum and who want to offer their opinions, I'm running serious money in bonds, and I'm constantly having to deal with the problem of getting rid of surplus cash that only becomes more aggravated when a bond I bought at a steep discount has run up and now has a fat, capturable premium.

"Do I do the trade and then scramble to find another place to park the money? Or do I sit tight and continue to clip the coupon?"

Sometimes, to not sell would be totally stupid. The gains are so fat that even when they are prorated over what would have been the former (and much longer) holding-period, the trade turns a higher profit. That's what running the numbers will tell you. OTOH, if the trade would result in a wash, or worse, undue grief, why do it? But the decision is rational and financial, not emotional.

Charlie
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But the decision is rational and financial, not emotional.

Charlie

Fungi,

Charlie has had a good run. All runs end one day. In my 'opinion' that will be sooner rather than later. In fact the FED is threatening to tighten by the middle of this year and yields are starting to rise now. This is the very early days of a bond market bear that can last thirty years.....the previous bear was thirty years....and the bull we are experiencing is now some thirty years old.....all shall come to pass.....

As for Fungi making 'emotional' decisions.....he is not doing that at all.....he is asking around and just taking it all in.....he is obviously working at gaining a lot of knowledge in all parts of the 'game'.

Dave
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MisterFungi,

regarding your treasury bond due 2019,

for what its worth....

I've got 10 to 15% of my portfolio in various US Treasury strips, maturing in 5 to 20 years or so. All had yields to maturity of 5 to 6.5% when I bought them.

Present yield is obviously a lot less. But I'm not selling them now, I'm happy with the YTM, and don't have to worry about what to do with the money if I did.
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Blacktreechaser,

a tip of the hat,

Dave
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Charlie writes: "Sometimes, to not sell would be totally stupid. The gains are so fat that even when they are prorated over what would have been the former (and much longer) holding-period, the trade turns a higher profit."

Yup. I hear you. Thnx.
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Charlie writes: "Sometimes, to not sell would be totally stupid. The gains are so fat that even when they are prorated over what would have been the former (and much longer) holding-period, the trade turns a higher profit."

Fungi,

That was my only point. When you run the numbers, then you know the consequences of the choices you're making. I've told this story before. But it bears repeating. Scott and I got into Hansom's 6.125's of '16 at low 40's. Within a year, it tagged par. Scott chose to flip. I chose to sit tight. We have and had different objectives and, therefore, made different choices. But we both ran the numbers.

The mistake you making --and then compounding-- is failing to distinguish between having beaucoup cash and having a problem with whether/how to put that cash to work. Taleb hold far more cash than you will ever have. 90% is his allocation. But he needs every penny of it right where it is, because of what he does with the other 10%. Perry Kaufman --one of the foremost trading theorists and practitioners-- , says the same thing about the utility of being deleveraged depending on one's investing/trading plan.

You think you have a cash problem (too much of the stuff). What what you really have is an planning problem (too little of it). Because you think you don't know what to do with the cash you've already got, you don't want even more of the stuff. But until you write your plan and truly know how much cash you need in order to manage your risks, you have neither too much, nor not enough, nor the right amount. You just don't know. Fix that problem, and what to do about the Treasuries will make itself clear. Maybe, just maybe, you really do need the redundancy they could create by just sitting on them. That redundancy creates "anti-fragility" (in Taleb's terms), and that's not a bad thing to have.

In other words, sound reasons can be found, and a coherent decision framework can be created, if you do the work. Why do it? Because you know you can trust the answers, and that they suit your own unique circumstances, personality, and needs. Let others decide for themselves what's best for them. Do the work to figure out what truly best for you. "Sell or sit tight?" Your investing plan should tell you that.

Charlie
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Sooooooo,

Mr. Fungi, you could now write a book "Everything You Always Wanted to Know About $950K, Aren't You Sorry You Asked?"

Don't forget to budget for martinis.
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<Mr. Fungi, you could now write a book "Everything You Always Wanted to Know About $950K, Aren't You Sorry You Asked?">

Not at all! I have learned tons in the past week. Plus, I have finally gotten off my duff and opened the line of communication to the TIAA-CREF folks.

I am researching the various TIAA-CREF and Vanguard funds into which I can direct future contributions. I am discovering that many of these funds are simply mixes of other funds -- e.g., 50% bond index fund, 30% equity index fund, 10% TIPs, 7% international index fund, 3% emerging markets index fund. Not exactly rocket surgery.

Next up: a talk with my Schwab guy.


<Don't forget to budget for martinis.>

Guinness for me. Margarita for DW.
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MisterFungi:

Not at all! I have learned tons in the past week. Plus, I have finally gotten off my duff and opened the line of communication to the TIAA-CREF folks.

I got into this thread late, but would suggest that you push the TIAA-CREF advisor for their in-depth, free analysis. They are able to use very sophistated modeling tools to look at your entire portfolio and provide you with advice, which because of their size can be very age specific. Depending on the financial plans you include with your spouse, they are also very good at including the entire family both in their analysis and in their counseling.

As you suggested, they also have many tools for further estate planning.

TIAA-CREF funds are lower than average, but higher than Vanguard. Also check your plan, because TIAA-CREF has added many new funds -- some from Vanguard and others from PIMCO. They are very big and very conservative, but they are non-profit and work for their participants (similar to Vanguard).

You may choose to rollover your funds wherever you choose. But use these very good services at TIAA-CREF before you do.

Good luck!

Bob
RYR Home Foo
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<...suggest that you push the TIAA-CREF advisor for their in-depth, free analysis.>

Absolutely! I intend to do that in person, ASAP. There is a TIAA-CREF office where I am now (in Hawaii), but they don't seem to have any available appointments. (I'll call again, to confirm that.) Otherwise, it'll have to be in March when we're back home.

Meantime, I have downloaded a slew of brochures from their website and am reading them, carefully. I have pretty much decided that I will leave a portion of the accumulated funds in a fixed annuity.

I also have roughly $900K outside of TIAA-CREF (mostly with Schwab) and half of that sits in cash. So there are larger issues than just the TIAA allocation ones. But the advisor can assist me in that.

Many thanks!
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Absolutely! I intend to do that in person, ASAP. There is a TIAA-CREF office where I am now (in Hawaii), but they don't seem to have any available appointments. (I'll call again, to confirm that.) Otherwise, it'll have to be in March when we're back home.

Meantime, I have downloaded a slew of brochures from their website and am reading them, carefully. I have pretty much decided that I will leave a portion of the accumulated funds in a fixed annuity.

I also have roughly $900K outside of TIAA-CREF (mostly with Schwab) and half of that sits in cash. So there are larger issues than just the TIAA allocation ones. But the advisor can assist me in that.

Many thanks!


1. Hope you're going someplace nice for two months (although Hawaii is my favorite vacation spot). We were there in December. Where do people who live in paradise go? My experience is California, Orlando or Las Vegas.

2. You may have two types of TIAA accounts. Parking funds in the optional annuity guarantees 3% and you can withdraw it at any time with no penalty. In the other type it takes balanced withdrawals for [I think] seven years to change your mind. The second usually pays slightly higher interest, but they both actually guarantee the same 3%. Look carefully if you want flexibility.

3. You'll get conservative advice from TIAA-CREF. The professional who has a GREAT relationship with my wife gladly deals with both Vanguard and our two different TIAA-CREF accounts and my own style of investing. They have offices all across the country.

Enough OT. I'll bow out now. Good luck!

Bob
RYR Home Fool
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Quick update for anyone who may be interested.

I cannot reallocate my past TIAA-CREF contributions. But I can -- and now have -- changed the allocation of future contributions (which will most likely be only the next 18 months, which is when I retire). The new allocation is:
50% Vanguard Balanced (VBAIX)
25% Vanguard Total US Stock Market (VITSX)
20% Vanguard Total International Stock Index (VTSNX)
5% Vanguard Emerging Markets Equity (VEMIX)

The balanced fund is roughly 60% US equities, 40% fixed income. The fees on these Vanguard funds are extremely low. Boring, I know. But I feel comfortable with it.

My wife and I also started Roth IRAs with Schwab and put the max possible for 2012 and 2013 into them. I have yet to invest those funds but plan to do so soon, focusing on dividend-growth (esp. things like REITs, for which dividends are not otherwise tax-advantaged). And I have a small traditional IRA that I've largely ignored for a few years but will now pay more attention to.

That still leaves the bulk of the Schwab investment accounts. I am gradually investing their large cash balances. There is now, and will be more of, a mix of stocks and bonds in them. Plus a bit fun money for trading. (I amazed myself by actually booking some profits trading TBF.)

We will probably keep three years' salary tucked away in savings/CDs. Zero debt. First grandchild expected in early March. I even signed up yesterday for the Great Aloha Run (on Presidents Day) here in Honolulu. Life is good.

So, there is still more to do. But I feel good about what we've accomplished already this year.

Thank you all for helping me get moving on this!

Fungi
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I cannot reallocate my past TIAA-CREF contributions

Fungi,

I assume this is the lion's share of the holding? And that other investments at Vanguard will be more along the lines of DCA? That there will or wont be a rollover from TIAA-CREF later?

The reason for these questions is that Vanguard has the Admiral funds for larger investments. The fees are ultra low and the dividend yields slightly higher.

Dave
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I assume this [TIAA-CREF traditional] is the lion's share of the holding? And that other investments at Vanguard will be more along the lines of DCA? That there will or wont be a rollover from TIAA-CREF later?

Actually, I'm a bit embarrassed to say, 100% of my university retirement plan for all these many years has been TIAA-CREF Traditional. (My Schwab account is of roughly equal size, and that's been what I've used for investing.) Future monthly contributions of 5% of my salary (which is double-matched by my university) will go into the Vanguard mix I listed.

After I retire in June 2014, I intend to keep about half of the TIAA-CREF Traditional in the fixed annuity and roll about half into the Vanguard funds over the course of the required time period (which is, like, 9 years).

I think this sounds reasonable, but I am wide open to advice.


The reason for these questions is that Vanguard has the Admiral funds for larger investments. The fees are ultra low and the dividend yields slightly higher.

Actually, the funds I get to use are the Institutional funds, which have even lower fees than the Admiral funds, I believe -- e.g., the annual fee on VBAIX is 0.08%.
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Fungi,

what you are doing might only fit in a good solid vanilla folder, but it is certain to do well and keep safe.

A good friend's wife from 1980 till now simply put her money into savings accounts and sat on the money. When the dust cleared after the tech meltdown in 2000, my friend used to kid that all his clients <auto shop owner> and many of his friends now had less money than his wife.

It is worth keeping in mind that those who ride high into the wind often fall to earth later.

Dave
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what you are doing might only fit in a good solid vanilla folder, but it is certain to do well and keep safe.

Hey, I thought I was going all day-glo orange folder by moving 25% into international equities! :-)

"Do well and keep safe" works perfectly for me. Thanks, Dave.

Fungi
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