Although I appreciate the lack of work each of these two funds create, I still like some play with my allocations. Honestly, I feel like the Lifecycle/Target Retirement funds are pretty fair Moderately Aggressive approaches, but I like to take a little more of the risk management and aggressiveness into my own hands. Right now, I’m choosing to supplement Lifecycle 2040 with TIAA Real Estate, CREF Inflation-Linked Bond, American Funds EuroPacific Growth Fund, and TIAA Growth and Income Fund – Retirement Class.

Early on, I put a good chunk of money (25-30%)into the TIAA Annuity, but I have about as much money in that now as I want. I honestly look at my “other 50-60%” allocations as fluid, and I invest in what I believe will grow value and reduce overall risk best over time. In other words, I “go with my gut” for that fluid portion of allocations.

I´m a professor at a public university in Georgia and I would like some ideas about how should I set up my portfolio for TIAA-CREF. I´m 32 and I have NO idea what it would be best.

I would really appreciate any comments or ideas!

Many thanks,
José M

Here is their current allocation:

Vanguard Total Stock Market Index Fund 72.1%
Vanguard European Stock Index Fund 10.5%
Vanguard Total Bond Market Index Fund 10.0%
Vanguard Pacific Stock Index Fund 4.6%
Vanguard Emerging Markets Stock Index Fund 2.8%

So clearly my TIAA-CREF allocation is only a crude representation of this.

The main problem for me right now is that fund selection isn’t all that great at TIAA-CREF, but I have limited options when it comes to vendors (as well as for funds within vendors). That being said, I could definitely overweight certain things in this account and then compensate for it elsewhere, where I have more freedom.

The other point to mention is that indexing may not be the best option for international investing for a couple of reasons. Firstly, the MSCI Index (which is the benchmark today) is quite narrowly defined. There are over 20,000 overseas stocks versus maybe about 1000 (not too sure the precise number) in the MSCI EAFE index. Hence, simply tracking the MSCI EAFE may not be the best diversification tool. Studies have also shown that stock selection plays a far more important role relative to country weightings. Hence, you may want to consider an actively managed fund for your international holdings rather than an index fund.

I’ve been reading through the ifa.com website a lot lately, and I really like their methodology of maximizing the risk/return tradeoff. My plan is to consolidate all of our retirement accounts there to get over the $100k minimum. Even if one doesn’t invest with them, their portfolio designs are thought-provoking.

I think the ‘target retirement’ funds are too conservative for people (like you amd me) who will (hopefully) enter retirement with a reasonably high net worth. To me, there’s really no reason for a reasonably wealthy risk-tolerant person to get away from equities. At your age it would seem that the 72/18/10 allocation is too conservative; I would put you in something like 20% domestic large-cap/ 20% domestic mid-cap/ 20% domestic small-cap /20% international large-cap /10% emerging markets large-cap/ 10% emerging markets small-cap. This roughly the IFA 100 portfolio (the most aggressive of their 20 portfolios). Something like this can usually be approximated with most fund families.