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I pretty much agree with jrr7.

The text below assumes "Asset Allocation with periodic rebalancing." There are other investment strategies, but this is the one I use and the one that TIAA-CREF suggests.

TIAA-CREF has an asset allocation calculator on their web site ( that you can go through and it will suggest a portfolio with target percentages in each of several "investment accounts". Answer the questions differently and you may see a different suggested portfolio. Those could serve as a starting point in figuring out your own asset allocation. (You might decide you would rather go with the index account or social responsibility instead of their suggested stock accounts, or, like me, you might decide to go with the bond market instead of the "traditional annuity" because of the restrictions on being able to move money out of the "traditional annuity" account.) If you have other investments, you might want to adjust your asset allocation in your 403(b) so that all your investments targeted towards retirement would be at your desired stock/bond/cash allocations.

Once you have your Asset Allocation, normally you would have your premiums (403(b) contributions) distributed to the various investment accounts according to the percentages you had established by your Asset Allocation plan.

Periodically (e.g., annually, or possibly semiannually), one should "rebalance" one's portfolio. Different investments go in and out of favor and grow at different rates, so over time one's portfolio will drift away from one's targeted asset allocation, resulting in more risk (stocks) than desired or, like we experienced in the past two years, less risk. There may also be a "rebalancing premium" because the rebalancing will nudge you into "buying low" and "selling high" by trimming back the winners and adding to the "out of favor" accounts.

The actual mechanics of rebalancing typically involves seeing how far each investment account is from its target percent (e.g., target_percent minus account_balance / total_balance), seeing how much money would have to be added to or taken away from that account to bring it to its target percent. The actual mechanics may be:

1. transferring funds. Take the investment account or two that are the most over their target amounts and move the overage to the investment accounts most lacking. Except for moving money out of the "traditional annuity" account and the real estate account, this can be done at the TIAA-CREF web site. (This wouldn't be the first choice in a taxable account due to tax consequences, but it is fine in any "tax favored" account that doesn't have fees for moving money between investment choices provided by that account.)


2. directing new money. One could specify new distributions (where one's investment money goes) for one's premiums (403(b) contributions). So if one wants, one could direct 100% of one's premiums to go to the investment account(s) that is (are) the most lacking according to one's asset allocation plan. This can be done on the TIAA-CREF web site, and can be done as often as desired. Then when the investment accounts are funded close to your Asset Allocation plan, switch the distributions back to match the Asset Allocation plan until the next time you need to rebalance. (This is a good way of rebalancing if you can't or are reluctant to pull money out of certain investment accounts, or you want to make a change but do it over time rather than one sudden change. It is also a "tax efficient" way to nudge a taxable portfolio back towards its target allocation.)
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