TIAA Traditional Annuity for the cash portion?

Discussion of the Cash portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
Drewskers
Full Member
Full Member
Posts: 73
Joined: Wed Nov 17, 2010 2:58 pm

TIAA Traditional Annuity for the cash portion?

Post by Drewskers » Sat Nov 20, 2010 1:14 pm

Does anyone else out there have a TIAA-CREF retirement account?

I happen to have an IRA with them, and I have been using it as the income anchor for my portfolio since it gives access to the "TIAA Traditional Annuity". From the prospectus:

"A guaranteed annuity backed by TIAA’s claims-paying ability, TIAA Traditional guarantees your principal and a 3% minimum annual interest rate."

I am planning to use this TIAA Traditional as the cash portion of my PP. It just so happens it's about 25% of my overall portfolio, and it also happens that, as an early retiree, this is the account I will start drawing living expenses from beginning in a couple of years. So it is comforting that it does nothing but grow! ;D I would not be very comfortable holding long bonds or the stock portion of my portfolio in this account, a major draw down could force me into withdrawing from my other IRA much sooner than I want. This seems like a pretty nice way to go for the cash portion, actually.

The only concern I can see with this plan is, what if TIAA goes bust? It seems a low probability event, what with the highest possible ratings from A.M. Best, Moody's, Fitch and S&P.

Drewskers
User avatar
MediumTex
Administrator
Administrator
Posts: 9078
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: TIAA Traditional Annuity for the cash portion?

Post by MediumTex » Sat Nov 20, 2010 7:04 pm

It's not as good as t-bills, but it sounds okay.

It reminds me a bit of the line from that Merle Haggard song:

"It's not love, but it's not bad."
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
Post Reply