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TIAA-CREF is the largest private pension plan in the world, with
more than $260 billion under management, including an estimated 1%
of all shares traded on the New York Stock Exchange. And yet, while
there is a wealth of information on IRAs, 401(k)s and other
investment vehicles, until now there has been little guidance for
the millions of TIAA-CREF plan participants and their
advisors.
The TIAA-CREF Book offers the definitive guide to
TIAA-CREF for participants, estate planners, and financial
advisors. Simply and clearly--and with a droll sense of humor--the
authors explain the often complex legal and financial aspects of
how the TIAA-CREF plan works, how the investment choices new
participants make can affect the funds available at retirement,
what the distribution options are for withdrawing money either
before or after retirement, and how to leave the fund as an
inheritance. For participants in the accumulation stage of their
careers, the authors explain the important differences between
fixed income securities (TIAA) and equity securities (CREF), and
examine the investment choices for both. They address such
important issues as how to allocate contributions, how portable an
account really is, and how plans differ from employer to employer.
In addition to the valuable primer on estate planning--from how to
quantify assets, needs, and income to how the Federal Estate Tax
affects TIAA-CREF accounts--the authors explore in detail the
distribution options available and help weigh the pros and cons of
each choice.
Drawing on their extensive work in the field of estate planning,
the authors cover the gamut of what it takes to make the most out
of a TIAA-CREF plan.
TIAA-CREF is a registered trademark of the Teachers Insurance and
Annunity Association/College Retirement Equities Fund Corporation.
Don't retireReviewed by Samuel Chell, 2009-10-28
When asked what he was doing with all of his time, a recently
retired colleague replied: "If I had known it would be this much
work, I'd never have retired." Read this book, and no doubt you'll
understand his point. I've never understood young people who
refinance, and then refinance some more to save a few additional
dollars, or who appear to fret--virtually a daily basis--over their
credit scores (apparently the sale of monthly updates of one's
"number," along with advice for raising it, are selling briskly).
Enjoy life while you can, and if you have a job, be grateful for
the "built-in" prioritizing of your time. With retirement, the
decisions that must be made each day can quickly seem overwhelming
with a resulting lack of focus and sense of fulfillment. Then,
there's the nasty business about what to do with all of those
contributions that had been going toward an annuity or pension. The
accumulation of a lifetime's worth of savings is there, but the
rules and regulations not to mention options are seemingly
inexhaustible with few obvious choices and no guarantees.
In recent years, there's been considerable disillusionment with
TIAA-CREF annuities from younger faculty who got in 10-15 years
ago. Ironically, the more TIAA-CREF diversified from its original
two choices (50% TIAA guaranteed rates; 50% CREF stocks), offering
more and more options and sub-accounts for members to select from,
the more it became just an average investment. If you did the old
50/50 between 1975 and 1995 and simply ignored all the market
fluctuations, you realized a handsome growth of your nest egg. If
at some point after the mid '90s, you started tweaking your monthly
allocations, seeking to avail yourself of the company's tempting
new menu of choices (international, growth, socially responsible,
inflationary bond, regular bond, real estate, index, etc.), you
were all the more likely to experience disillusionment. As TIAA's
own records show, your investments would, in most instances, have
done as well in a money market account or similar guaranteed
investment. All that tweaking could be looked upon either as wasted
time or so much idle game-playing, take your pick. All of which
makes particularly irritating all of the "gotcha" fine-print
clauses that TIAA-CREF has introduced into its plans since the
near-collapse of the banks in mid-2008. Formerly, the company
seemed to encourage members to avail themselves of its many new
sub-accounts and convenient website transferring of money from one
fund to another. But suddenly I'm finding that a slightly premature
transfer of a mere one thousand dollars from one CREF fund to
another stock, each with portfolios of hundreds if not thousands of
holdings, can trigger the infliction of a "penalty"--a suspension
of transfer capability or no interest payments for a set length of
time. Worse, if you read the fine print, TIAA has not only
developed excessive cautiousness, defensiveness and distrust toward
its members but does a poor job of disguising it. One of their
sentences suggests that the member who attempts to perform so
"devious" an action as the one described above and to conceal it
(!) (we're talking about moving one or two thousand dollars a
trifle early into a fund at least the size of the S&P 500 --
even a "professor," however absent-minded, would have to be
mindless to occupy his time with such "nefarious" activities). The
organization's fine print warns that such surreptitious, poorly
disguised, illegal activity will most likely be detected by the
company's ever vigilant detectives! If at one time I was inclined
to characterize TIAA in terms of the merit signified by those last
two letters, that grade has changed since the country'sl financial
fiasco of mid-2008. At this point, I would be hard-pressed to give
the organization better than the grade represented by the first
letter of CREF (let's hope we don't get to either of the last two
letters). There's such a thing as over-reaction--then there's
something that goes considerably beyond it: paranoid
overreaction.
Given the publication date of this collection, the articles it
contains are based on the rosier, earlier scenario and, moreover,
don't fully factor in the goliath that TIAA-CREF has become in the
industry, "farming out" much of its retirement planning business to
sub-contractors supposedly overseen carefully by the giant annuity
fund. And as suggested, TIAA-CREF may no longer be the
consumer-friendly, no-brainer investment it once was. Besides
numerous fine-print restrictions such as those alluded to above,
comparisons of TIAA-CREF funds with comparable funds, when done on
"neutral" sites sponsored by the government frequently reveal that
the TIAA-CREF funds have performed no better than other funds in
the same category and that their expense fees, though dependably
reasonable, are occasionally higher than some of their competitors.
Finally, as I have just recently discovered, making a withdrawal
from your account entails a period of time not to mention paperwork
and complications experienced at few other companies (in fairness,
my other withdrawals have not been from accounts eligible for
annuitization).
Two years ago a phone representative at TIAA told me to forget
about IRA rollovers--they were a consideration only for those in
early or mid-career; now the company appears to be urging the
direct opposite: roll over your account to an IRA, the sooner the
better, and better make it with one of our sponsored retirement
planning associates. Senator Herb Kohl (Wisconsin) recently wrote a
letter to the company scolding them (along with Fidelity) for ads
encouraging seniors to roll over accumulated money to an IRA, a
move which, according to Kohl, would actually hurt many seniors. So
there's definitely a need for a book such as this, but updated,
with more reader-friendly prose. This one was published before the
recent all-out push to convince members their accumulation would be
more "manageable" in an IRA, and the few attempts at lightening the
tone (one sentence says not to worry, your feet won't be placed in
a mold for concrete shoes) are too few and too mordant to serve
much purpose.
One thing seems obvious: given the action that's happened in the
markets this past week: placing your savings in a retirement
account that prevented purchase of Amazon stock would have been a
big mistake. (And look for trading fees comparable to those at the
major, competitive brokerages which, unlike the 50-100
dollar-per-trade fees of 20 years ago, have come down into the
vicinity of ten dollars and even less.) In sum, the patient reader
will find good advice and lots of info in this volume but would
most likely do just as well with the material on the TIAA-CREF
site.
Just avoid TIAA-CREFReviewed by owl, 2009-02-06
Probably the best advice about TIAA-CREF is just this: stay away. My TIAA-CREF account made about zero returns for ten years, ever since I started it, until 2008 of course, when it tanked. Now I am trying to roll over the funds to a retirement account run by another company, and TIAA-CREF is refusing to release the funds. It has been four months, and they still have not filled my transfer request. Once you realize how crappy TIAA-CREF is, you won't need this book.
Not very helpful. Does anybody out there know...Reviewed by Mad Max, 2008-04-10
I agree with the other two reviewers. This book is not very helpful
in helping with investment advice. It is mostly reprinted articles
from an academic journal.
I listen to Suze Orman and a few others, and I know basically what
I should be doing with my retirement accounts. But I don't know how
to apply that knowledge when looking at my TIAA-CREF options.
Year ago I used to subscribe to a monthly newsletter, something
like "Market Management for TIAA-CREF". It told you exactly what to
do with your account for the best results. Has anybody out there
ever heard of it, or know where/how to subscribe? If so please
leave a comment here...
Can't Judge a Book by its PublisherReviewed by Anonymous, 2002-12-07
I am responding to the previous reviewer's disappointment with the book, given that it was published by Oxford U. The days when we could count of the big name university presses to publish only the finest are, sadly, past. It is frustrating not to have the reliable benchmarks. Word processing, the automated printing and publishing process, and the general decline of academic standards - whatever the reasons, we are being swamped with second and third rate monographs from all quarters.
A DisappointmentReviewed by Anonymous, 2001-04-11
These authors published two informative articles about TIAA-CREF in a professional journal in 1997 and 1998. Although the articles were intended for estate planners, they can be understood by a lay person who reads them carefully. I expected this book to present the substance of the articles in a more accessible way. It does not. Apart from the section on estate planning, it contains little information not obtainable directly from TIAA-CREF. It shows signs of having been written with haste. It is poorly edited (surprising for Oxford University Press) and is in places inconsistent and unclear. The book is a disappointment.
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