Unlocking Liquidity in Your Higher Education Retirement Plan: A Little-Known TIAA Traditional Strategy
Greetings, higher education professionals! If you're among the many dedicated employees in the academic world, you're likely familiar with the complexities that come along with your retirement account(s), especially when it involves the enigmatic TIAA Traditional. Today, we delve into a powerful but lesser-known strategy, one that can help you unlock liquidity within TIAA Traditional. Our guide through this financial labyrinth is Greg Shepard, an expert from S&A Financial Services, renowned for his ability to simplify the intricacies of higher education retirement plans.
The TIAA Traditional Challenge
Navigating the world of retirement planning can be daunting, but TIAA Traditional, a common choice among higher education professionals, often adds an extra layer of complexity. Greg Shepard has seen it all in his years of helping individuals like you make the most of their retirement plans. Today, he sheds light on a strategy that has gained newfound relevance due to the current landscape of high-interest rates within TIAA Traditional.
Plan Specificity
Before we dive into the strategy, it's crucial to emphasize that this isn't a one-size-fits-all solution. Retirement plans, especially within higher education institutions, can vary significantly. It's imperative that you understand whether your plan allows for this strategy. To determine this, Greg recommends two steps: first, contact TIAA directly, and second, reach out to him. He can provide valuable insights into whether your plan permits the strategy.
Unlocking Liquidity - The TIAA Traditional Strategy
So, what exactly is this strategy, and why might you want to consider it? The primary goal is to move funds from a less liquid contract within your retirement plan to a more liquid one while keeping your money within the same employer retirement plan. This maneuver is particularly valuable if you're still employed and wish to create liquidity within your retirement investments.
Here's an example: Imagine you have Legacy money sitting in the TIAA Traditional RC (Retirement Choice) contract. This contract is illiquid, meaning accessing your funds can be challenging. However, a new contract called RCP (Retirement Choice Plus) offers the tantalizing prospect of high-interest rates. In this hypothetical case, the RCP contract is offering an attractive interest rate of five and three-quarters percent.
To unlock liquidity and capitalize on this high rate, you can initiate a seven-year TPA (Transfer Payout Annuity) strategy. This strategy allows you to withdraw money from your TIAA Traditional RC contract and direct those payments into the liquid RCP contract. It's essential to note that this strategy is only possible within the same employer retirement plan and under specific plan guidelines.
This maneuver creates liquidity, providing you with the freedom to access your funds while still taking advantage of high-interest rates. It's a powerful way to make your retirement savings work harder for you.
Conclusion
In conclusion, understanding your retirement plan and making informed decisions can significantly impact your financial future. The little-known TIAA Traditional strategy highlighted by Greg Shepard offers an exciting opportunity to unlock liquidity and potentially maximize your returns. Remember, it's essential to consult with experts, both within TIAA and knowledgeable financial advisors like Greg, to determine if this strategy aligns with your specific plan and financial goals. With the right guidance, you can navigate the complexities of your higher education retirement plan and make the most of your hard-earned savings.
Contact Information: If you have questions or need assistance with your retirement plan choices, you can reach out to Greg Shepard at greg@shepardfiancial.com
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*Nothing discussed in this blog post should be construed as investment advice. Each situation is unique and you need to receive professional advice from independent fee-only financial advisor that's familiar with higher ed retirement plans prior to implementing any strategies discussed or thought of on your own.
**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.