2 More TIAA Traditional Mistakes

April 28, 2024

Are you struggling to decipher the complexities of your TIAA retirement plan? Greg Shepard, a seasoned financial advisor, shares insights into common pitfalls and creative solutions encountered by individuals like you. Let's delve into these scenarios and explore how to simplify your TIAA journey.

Hey there, readers! Greg Shepard here from S&A Financial Services, specializing in demystifying the intricacies of higher education retirement plans, especially those involving TIAA accounts. In this blog post, we'll explore some fascinating yet cautionary tales of attempts to navigate TIAA's rules and regulations, along with insights into crafting effective retirement strategies.

Understanding TIAA Traditional Rates

Before diving into the scenarios, let's grasp the context. As of early April 2024, TIAA Traditional rates saw a significant decrease for new deposits since March 1, 2024. This change has prompted many to seek alternative strategies, leading to creative attempts to optimize their retirement plans.

Mistake 1: 120-Day Restoration Rule Rollover IRA Maneuver

Imagine a retiree from a previous institution with a liquid TIAA contract seeking to capitalize on the higher rates of TIAA Traditional. They decide to transfer funds to a rollover IRA, intending to reintroduce them into TIAA Traditional. Despite their efforts to exploit the 120-day restoration rule, hoping to benefit from higher rates, their plan falls short. TIAA detects the attempt and maintains the original rate, thwarting the strategy.

Mistake 2: Segregating Funds - 403b to 457

In another instance, an individual aims to leverage the higher rates of TIAA Traditional within their current employer's retirement plan. They transfer funds from a liquid 403b to a liquid 457 account, intending to introduce them into TIAA Traditional. However, TIAA identifies this attempt to manipulate rates and maintains the original rate, debunking the strategy.

Key Takeaways and Expert Advice

These scenarios highlight the importance of understanding TIAA's rules and limitations. While creativity is commendable, it's crucial to align strategies with TIAA's regulations to avoid disappointment and potential repercussions.

If you're grappling with TIAA complexities or contemplating innovative strategies, seeking expert advice is paramount. Greg Shepard emphasizes the significance of consulting professionals to navigate TIAA effectively. Whether it's maximizing retirement benefits or simplifying your TIAA journey, expert guidance can make a world of difference.

Conclusion

Navigating TIAA requires a blend of expertise, diligence, and adherence to regulations. While creative strategies may seem enticing, ensuring compliance with TIAA rules is essential to safeguard your retirement savings. Remember, expert guidance is readily available to help you optimize your TIAA retirement plan effectively.

In conclusion, by learning from these cautionary tales and seeking expert advice, you can navigate your TIAA retirement plan with confidence and clarity. Stay informed, stay compliant, and embark on your retirement journey with peace of mind.

Greg Shepard

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*Disclosure* S&A Financial Services, Inc. is a registered investment advisor. Content presented is for informational purposes only and should not be considered as investment advice or as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Always consult with your tax advisor or attorney regarding your specific situation.