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Here's my dilemma. My employer offers a retirement annuity through TIAA-CREF, and that's it. No other option for 401(k) or 403(b). They will put in 8% of annual income if the employee invests 5%. So that first 5% is a no-brainer. However, is it worthwhile for me to contribute beyond that 5%, or is my money better off in a (taxable) index fund?

One option you may not be aware of is that if you open an SRA account with TIAA-CREF (which is where you would put additional funds that aren't matched by your employer), as you accumulate funds in your SRA you may transfer them out to a 403b(7) account that you open as an individual with another mutual fund company, i.e. Vanguard.

However, as was mentioned the TIAA-CREF annuities compare well with other mutual fund families and unless you have some special interest that isn't covered by the CREF options, I don't think it's worth the trouble of opening the outside 403b(7).

It may also be possible to transfer your "regular" (employer-matched) funds to a 403b(7), but not likely. Accounts which contain employer-contributed funds are subject to clauses in the agreement between the employer and the provider (TIAA-CREF in this case) which prohibit those accounts from being moved to a 403b(7) while the employee is still active with the employer. This feature seems to be built into most plans, as it guarantees the provider will manage the bulk of plan monies.
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