By: Revanche

New Retirement Plan, two vendors?

April 25, 2007

Here’s an interesting twist I didn’t see coming: The university has posted our new retirement plan information online, which I’ve filled out, so all I have to do now is decide which funds I want. The matched 5% goes to the 401(a) and is less than my current contribution, so I’m going to continue to contribute to the Supplemental Plan [my current 403(b)] as well. Turns out they allow me to contribute to different vendors for each plan. So, do I want to branch out to Fidelity/Prudential/TIAA-CREF plus Vanguard? Or just stick with Vanguard? (Ok, probably not TIAA-CREF, I’ve heard too many horror stories about them.)

On one hand, I feel uneasy about keeping all my money in one basket. On the other hand, it’s probably better to keep all the accounts under one roof. That way, I’ll pay fewer fees for non-retirement account investments when I become a valuable, high-account-balance customer.

In the meantime, I should re-evaluate the funds I’ve got and whether or not I want to change my allocations.

2 Responses to “New Retirement Plan, two vendors?”

  1. Anonymous says:

    Probably a mistake to write off TIAA-CREF because of “horror stories.” That non-profit firm has a long record of success and integrity in the investment business. Unfortunately, their customer list is heavy with academics — that is, people with the inclination to air out their problems endlessly. I suggest that TIAA-CREF doesn’t have a disproportionate number of horror stories, they just have more customers who love to write about them. Try to keep in mind that the words “non-profit,” “long record,” “success,” and “integrity” don’t often appear together in a sentence about an investment manager. You could also add “low-fee.” There’s TIAA-CREF and there’s Vanguard. Try to keep your head and think about the big picture.

  2. ~Anon~ When comparing the two, TIAA-CREF and Vanguard, side by side, they seem comparable with the exception of the horror stories from various bloggers vs. none from the Vanguard customers. I’m not sure that it makes sense to discount the previous experiences of their customers simply because it seems like they love to write about it, after all, they’re bloggers or in some cases, journalists!

    Anyway, I’ve always had good experiences with Vanguard so that’s the basis for my decision.

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