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Lieutenant
Posts: 53
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Post by stats on May 6, 2021 21:56:57 GMT
Hi all not doing well.
We are moving my TIAA TRADITIONAL to Fidelity What is a good alternative ETF probably Originally I thought DODX But now having 2nd thoughts
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Post by yogibearbull on May 6, 2021 22:07:58 GMT
There is NO REPLACEMENT for 3%+ stable-value [guaranteed principal + interest] in the taxable universe. And there is no way core-plus DODIX can work similarly. Edit/Add: There are several types of TIAA Traditional. If you have the newer Traditional-IRA, I can understand. For those not familiar, here are the current rates, armchairinvesting.freeforums.net/thread/1429/tiaa-traditional-rates-1-2021
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stats
Lieutenant
Posts: 53
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Post by stats on May 6, 2021 22:40:29 GMT
I understand all that.
Our TRAD was bought in the 70’s we are taking our TIAA out on my death. The question is what is a reasonable replacement
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Post by anitya on May 6, 2021 23:07:54 GMT
There is NO REPLACEMENT for 3%+ stable-value [guaranteed principal + interest] in the taxable universe. And there is no way core-plus DODIX can work similarly. Edit/Add: There are several types of TIAA Traditional. If you have the newer Traditional-IRA, I can understand. For those not familiar, here are the current rates, armchairinvesting.freeforums.net/thread/1429/tiaa-traditional-rates-1-2021I agree. Many, many years ago, I put 75% of my parents money in the TIAA traditional (paying 3% now) thinking it is a temporary place until I can do some research for a more risky alternative but my parents are hooked on it and do not want to move the money out of it. Recently, my dad reminded me that the rate can go higher.
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Post by yogibearbull on May 6, 2021 23:18:00 GMT
anitya, very true. A feature of stable-value [SV] funds is that their crediting rates rise when the general interest rates rise. TIAA Traditional crediting rates follow some unspecified combo of Treasury and corporate bond rates. And when many talk about the safe withdrawal rates of 4%, a guaranteed 3%+ now isn't bad at all.
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Post by Capital on May 7, 2021 22:07:23 GMT
Unfortunately SV funds are not available outside retirement plans. Looking under the hood of these investments it is easy to see why. In order to make them work you need the stability of retirement plans where assets do not move very much. Buying and selling out of GIC postiions does not lend itself to short term trading. IMHO it would be nice to have them in retail even if there were limitations on distributions.
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Post by yogibearbull on May 7, 2021 22:16:51 GMT
Unfortunately SV funds are not available outside retirement plans. Looking under the hood of these investments it is easy to see why. In order to make them work you need the stability of retirement plans where assets do not move very much. Buying and selling out of GIC postiions does not lend itself to short term trading. IMHO it would be nice to have them in retail even if there were limitations on distributions. Yes, they count on stability and stickiness of money in workplace retirement plans. There are also provisions, not activated often, to prevent runs and allow gradual loss recoveries - these are better enforced in workplace group plans and would be difficult to enforce in IRAs or taxable accounts. In principle, a restricted vehicle may be developed for IRAs, but NO ONE has done this yet. Only stable-value outside of workplace plans is money-market funds and they keep tinkering with it [more reforms coming soon as 2016 reforms didn't fix much] and they pay almost nil.
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Post by anitya on May 7, 2021 23:22:57 GMT
Unfortunately SV funds are not available outside retirement plans. Looking under the hood of these investments it is easy to see why. In order to make them work you need the stability of retirement plans where assets do not move very much. Buying and selling out of GIC postiions does not lend itself to short term trading. IMHO it would be nice to have them in retail even if there were limitations on distributions. Yes, they count on stability and stickiness of money in workplace retirement plans. There are also provisions, not activated often, to prevent runs and allow gradual loss recoveries - these are better enforced in workplace group plans and would be difficult to enforce in IRAs or taxable accounts. In principle, a restricted vehicle may be developed for IRAs, but NO ONE has done this yet. Only stable-value outside of workplace plans is money-market funds and they keep tinkering with it [more reforms coming soon as 2016 reforms didn't fix much] and they pay almost nil. My recollection is that my parents' IRAs at TIAA also have TIAA Traditional.
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Post by yogibearbull on May 8, 2021 0:46:15 GMT
Yes, they count on stability and stickiness of money in workplace retirement plans. There are also provisions, not activated often, to prevent runs and allow gradual loss recoveries - these are better enforced in workplace group plans and would be difficult to enforce in IRAs or taxable accounts. In principle, a restricted vehicle may be developed for IRAs, but NO ONE has done this yet. Only stable-value outside of workplace plans is money-market funds and they keep tinkering with it [more reforms coming soon as 2016 reforms didn't fix much] and they pay almost nil. My recollection is that my parents' IRAs at TIAA also have TIAA Traditional. Well, yes, but there is something special about those "TIAA IRAs". They are open only to "eligible" members. And the type of Traditional rate credits depend on whether it existed pre-10/11/10 [old IRA; Traditional rates were same as in TIAA 403b] or was opened on/after 10/11/10 [newer IRA; Traditional rates are much lower]. I believe that your parents are in the pre-11/11/10 IRA category. At one time, you asked this at M* - you are also "eligible" by relation to eligible members but would be in on/after 10/11/10 IRA category. General public ["noneligible"] can also open IRAs "at TIAA" but the the above about Traditional doesn't apply to those.
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stats
Lieutenant
Posts: 53
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Post by stats on May 10, 2021 16:36:22 GMT
Thanks for the comments.
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