my 20yr t-cref stock acc. has lost 60k (25%) in 6 mo. should i ride it out.

Oldman answered one year ago …

I sympathise with you. TIAA-CREF has a variety of investment options, and I assume you have a 403(b) account. Their performance is within a couple of percent of the indexes tracked. TIAA, on the other hand, has an annuity-type contractual interest rate pay/period, plus "bonus" percentages for various periods. The difficulty you have is two fold: Firstly, except for a retirement transition payment, there's no way you can liquidate a TIAA contract, except on a 10 year "Transfer Payout Plan", when you leave service or retire. Otherwise, they'll estimate your life-span at 99+ years and payout the minimum of any annuity from any company...just to keep reserves for the few elderly centenarians. You can investigate this at http://www.immediateannuities.com ...where their payout is at the bottom of hundreds of insurers. It's not for the "Greater Good" at all.

Secondly, with regard to the CREF options, over the past decade, their index tracking has been below the index, most of the time. It used to be some times above, and sometimes below, but their CREF performance sucks, for the Stock, Global, Equity Index , etc. choices. Their only account in the last 10+ years that has had some positive (above an index) return is their TIAA-Real Estate fund, which has some limitations on switching, but OWNS real estate and has experience in managing it... perhaps better and longer than any REIT around.

My own experience with them was so disappointing and they gave me such obfuscating answers to my requests for income illustrations based on a "per $100000" initial value, that I got tired of their lies and converted a substantial contract to a transfer payout plan. They're great at giving optimistic presentations and have even hired hacks to write articles for the Financial Planning Association, to show how "superior" their retirement payouts are...but they've been criticized by many others at FPA.org for their selective use of statistical measures. When I, in 1998, enquired how they could say that n dollars/month represented a joint-full survivor payout at some percentage, when my own calculations were quite different, I got a nasty letter from one of their actuaries, saying that I didn't have the training or understanding of their calculations, to be able to understand their methodology. But, I did, I've done a lot of actuarial and survival statistics (in connection with drug trials) and a lot more sophistocated statistical ananalysis that's been published in peer-reviewed scientific journals, and I had excellent statistical consultants at my Medical School, who also saw the flaws and misrepresentations in their publications... and I was able to show that even then, they were misrepresenting the payments, because they subtract a significant amount from your payments to fund an insurance pool so that elderly centenarians will get some money. Which is fine, except if you do a 1035 exchange and have a normal lifespan, or have health problems, you get secrewed.

Morningstar loves them, because they have a low "expense" ratio...but if you check their CREF transactions, it's not so low...and they're great at promises, but awful at payments...their "supervisors" can't communicate with the officials that actually process payments...and they'll hold up rollovers and transfers to another custodian out of sheer orneriness:

My wife's request to transfer funds to a Federal TSP account (for an annuity via MetLife), was held up for 110 days, and she "lost" the opportunity to get $1200.00/year more in an annuity from MetLife, because the FedFunds rates dropped during those 3 months. ( She got a lovely letter of apology, and checks for a few months of "lost interest", becuse of their delay, but the time/opportunity cost was a real problem) In addition, I set up a "fixed payment" payout from a remaining CREF money Market account, at monthly intervals, and the second month, they messed up the payment for 15 days, because their computers didn't have the correct info programmed into them, even though I jumped thru all their hoops and set it up the September prior to the start (the following January). I also got a letter of apology about this.

I don't follow their IRA's, but I would begin to look at other companies for better performance and reasonable payouts. I suggest T.RowePrice or Vanguard. I do have funds in a 403(b) at Fidelity, but I wouldn't ever recommend TIAA-CREF to anyone who has some investing sense...or expects a normal annuity from them.

My advice to you, is to leave the funds where they are for two-three years, (unless you have an urgent need for them or income from them now)...and when they recover, and probably grow to 300 K, arrange a trustee-trustee transfer with some company you can trust to pay you what a normal payout should be. Managing a payment stream from sheltered accounts is a bit complex, and involves having some income with a fixed period & payment, and leaving some to grow, for use perhaps 10 years beyond the initial payout.