Question

My retirement monies are invested at tiaacref.org - pick at least 2 funds, at most 4 funds at tiaacref where my monies should be invested and tell me why. Your reason should be convincing! If the market dips can I ride it out? What's the longest time between a market dip (Dow or S&P 500) and it returning back to the before dip value? When did this occur?

Answer 1

A) Before you start putting money away, make a list of things you’re saving for and rank them in order of priority.

As you are a retiree and low to moderate risk taker, your retirement monies can be invested in 2 types of funds:

1) Annuity

You should invest in annuity as it is an insurance product that you can purchase to provide income in retirement. You are not required to pay taxes on any growth until you take money out (A 10% penalty may also apply for withdrawals before age 59 ½). Your investment choice should be fixed annuity as it gives a guaranteed return.

2) TIAACREF Lifecycle Retirement Income Fund

You should invest your retirement monies in TIAACREF Lifecycle Retirement Income Fund as the Lifecycle Retirement Income Fund seeks high total return over time primarily through income, with a secondary emphasis on capital appreciation. The Fund invests according to a relatively stable asset allocation strategy and is designed for investors who are already in or entering retirement.

Yes if the market dips you can ride it out as fixed annuity provides you fixed guaranteed return. Also, Lifecycle retirement income fund is invested in relatively stable assets which are less volatile.

B) Historical stock charts seem to show that it took more than 25 years for the market to recover from the 1929 crash.