Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Again, easily known based on the contract OP has for this account.
The statements as well are pretty clear.
Seems odd he would keep calling a traditional annuity account a traditional account, so I am not convinced.
I think a lot of the confusion here is based on the fact that the OP is transitioning (or at least thinking about transitioning) from the Traditional Account (which is used during the accumulation phase) and the payout options which are available to him. I was pretty confused too until I read the article I linked above. There's a second payout option called "Income From The Traditional Annuity" - but I am not sure why anyone would select an "interest only" annuity. There's also a (third) variable annuity option (but I don't think the OP is interested in that option). Robyn
Thanks for the explanation. I got a similar explanation by PM from a former forum participant. I am not sure what I am going to do with my relatively small holdings in this fund. I don't pay much attention to bonds and typically make my returns with stocks and stock funds. Lately I am starting to become concerned. Typically I don't pay much attention to elections but this year is unique and I am concerned the political situation could affect the markets.
I personally think that events other than political ones will be a more important factor driving markets down the road. For example - I am keeping a close eye on the price of oil - which is affected by moves in the dollar - which in turn are affected by what the Fed and other central banks do. For example:
When it comes to equities - I am more concerned about valuations than anything else. For example - the SP500 has a trailing PE in excess of 25 today. Robyn
I think a lot of the confusion here is based on the fact that the OP is transitioning (or at least thinking about transitioning) from the Traditional Account (which is used during the accumulation phase) and the payout options which are available to him. I was pretty confused too until I read the article I linked above. There's a second payout option called "Income From The Traditional Annuity" - but I am not sure why anyone would select an "interest only" annuity. There's also a (third) variable annuity option (but I don't think the OP is interested in that option). Robyn
There is a fixed annuity, and that is the one I want. The payout rate for me, if it starts in January 2017, would be 6.18%. That seems like a good rate, compared to fixed annuities from other companies.
My point is he could not have elected otherwise if his employer prohibits a lump sum payout. Nevertheless, I'm guessing that OP is as thankful for his TIAA annuity as I am mine. Sure, the OP is struggling to determine how he wants to safely invest the remaining funds but certainly not the funds in his TIAA account. I think of the TIAA annuity as a pension. Soc Sec and annuity = two legs of the so called stool.
I personally think that events other than political ones will be a more important factor driving markets down the road. For example - I am keeping a close eye on the price of oil - which is affected by moves in the dollar - which in turn are affected by what the Fed and other central banks do. For example:
When it comes to equities - I am more concerned about valuations than anything else. For example - the SP500 has a trailing PE in excess of 25 today. Robyn
Usually I would agree that political concerns are not that important for investment planning. The fact that both candidates are intensely disliked could have an impact beyond the typical.
I also agree about the impact of oil prices. Beyond that the world economies are more important that ever.
I am less concerned about stock valuations. The current CAPE P/E of over 25 sounds high, especially since there is an out of date idea that the average should be 15. There have been very significant changes in GAAP. Unfortunately there is no easy way of correcting the historical data for the changes. The best estimates I have seen indicate that the new norm should be about 22. We are only a bit over that which is expected when bonds and other investments have been poor. Also we are not seeing a rapid increase in the CAPE. Growth, stock buy backs, and investor caution have keep the rate of increase low. All of those trends are likely to continue. I will be concerned if we ever see anything approaching overbuying.
In any case, we are certainly in interesting times.
It recommends buying 5 year CDs that don't have big early withdrawal penalties. You can actually get 1.75% at Ally bank (I don't know what the early withdrawal penalty is though).
So if interest rates go up a lot, you withdraw early from the 1.75% CD and get one at a higher rate, and you still are probably doing MUCH better than bonds. And it's FDIC insured.
So for example I could annuitize my TIAA $110k account at 6.18% per year. Buy CDs with $300k at 1.5% or more. Keep about $100k in a money market that has decent interest.
This plan would work MUCH better than the TIAA plan I was given.
Meanwhile I could continue reading about investing and if I ever felt confident I could make more with stocks and bonds I could do that also.
[quote=Good4Nothin;44879905]I think this post belongs here because retirees are usually advised to keep more of their investments in bonds than in stocks. My TIAA adviser recommended 90% bonds, since I told him I can't tolerate risk.
Ok, makes sense so far. However I asked him if now might not be a great time to buy bond funds, since interest rates can't go lower and inevitably will rise, some day. He gave me an answer that I did not understand and don't remember.
Since then I have read various articles on whether this is a bad time for fixed income investments. I do not have a lot of knowledge about, or experience with, investing, so I am coming at this mostly with plain old common sense (what little I have).
I have learned something from the articles I read so far, and also from the comments sections. Trying to be wary if an author is saying bonds are just fine, regardless of interest rates, if it seems like they are selling something. Noticing if commenters think the article is BS or not.
What my common sense says after what I read so far: Do not buy bonds or bond funds now. They will decrease in value.
One article said don't buy bond funds, but do individual bond laddering instead, with long-term bonds. I think I would probably be dead before I made money with a long-term laddering strategy. Also it is confusing.
So my advice right now is, stay away from bonds. Nice that my TIAA adviser wanted me to throw more than $300k into bonds.
So if we should avoid bonds, then of course the alternative is stocks, right? No, stocks will probably go down also.
Buy a good mattress and stick your money safely in there.[/QUOTE
I have done quite well with stocks the past ten years. Sure; it's a roller coaster but bonds?? What I've done recently which has been very profitable is to buy only gold and silver stocks. When the market is down the metals go up and vice versa.
I just can't figure this thing out. So I''ll repeat: "I have done quite well with stocks the past ten years. Sure; it's a roller coaster but bonds?? What I've done recently which has been very profitable is to buy only gold and silver stocks. When the market is down the metals go up and vice versa."
I got a mid-five figure 'inheritance" in '87 . I put half in bonds , half in stocks. The stocks have done five times better.
There is a fixed annuity, and that is the one I want. The payout rate for me, if it starts in January 2017, would be 6.18%. That seems like a good rate, compared to fixed annuities from other companies.
So give me your exact figures - amount to be annuitized - and age - and monthly payout - and I'll give you the exact guaranteed interest rate (although you could do it yourself with a simple annuity calculator). It's not rocket science. Robyn
...What I've done recently which has been very profitable is to buy only gold and silver stocks. When the market is down the metals go up and vice versa.
I got a mid-five figure 'inheritance" in '87 . I put half in bonds , half in stocks. The stocks have done five times better.
That thinking about gold - like jrlinky's thinking about his bond fund pricing - is pretty much totally wrong too. The price of gold is more dependent on interest rates. Since holding gold doesn't pay interest - its value is more positively correlated with low or negative interest rates than anything else.
As for your bond performance - shows you don't know anything about investing in bonds. What kind of bonds did you buy? Robyn
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
