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Retirement Allocations

Retirement Allocations. Patrick Lyons May 15, 2007. Unofficial Informal Meeting. Disclaimer - I (PJL) am not a professional financial planner. Purpose of meeting is to promote discussion. I would like to hear other people’s opinions.

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Retirement Allocations

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  1. Retirement Allocations Patrick Lyons May 15, 2007

  2. Unofficial Informal Meeting • Disclaimer - I (PJL) am not a professional financial planner. • Purpose of meeting is to promote discussion. • I would like to hear other people’s opinions. • Like it or not, we all should (must) be proactive financial planners. • We continually make implicit (or explicit) allocation decisions.

  3. Allocations: Fixed for Life? • Should allocations change as overall market conditions change? • It’s been a wild ride • What will the next 30 years bring???

  4. TIAA Since May 1996 • Rode Growth up • Rode Growth down • TIAA advice – stick with it. It will come back eventually.

  5. TIAA Since Jan 2000 • Major alternatives • Stock • Growth • Real Estate • Inf Bond

  6. PJL Since Jan 2000 • Would have been nice to switch Growth to Real Estate • Unrealistic to expect • Would have $2.2mil + TIAA Traditional for retirement • But, …

  7. PJL Since Jan 2001 • One year later, Growth down 30% • Ready to switch to Real Estate, but just did not do it. • Would have $1.6mil + TIAA Traditional. Close to retirement goal.

  8. PJL Since Jan 2005 • Relative decision • Since July, 2006 • Stock better increase than Real Estate, but • Real Estate less volatile • Real Estate: • Only 1 withdrawal per quarter

  9. CREF Since May 1, 2006 • In previous graph, since July 18, 2006 • Slope of Stock (33%) better than • Slope of Real Estate (13%). • Even since May 1, 2006 • Slope of Stock slightly better than Real Estate.

  10. CREF Stock • Uses composite benchmark of: • Russell 3000 Index - broad U.S. stockmarket • MSCI EAFE+Canada Index – 22 developed nations • MSCI Emerging Markets Index – 25 emerging nations. • Benchmark weightings recalculated daily: • March 31, 2007 weights were: • 76.2% US • 22.6% developed nations • 1.2% emerging nations. • Morningstar Ratings – 5 star for 3, 5, 10 years

  11. Allocation History • Should I increase Stock and decrease Real Estate?

  12. Non TIAA-CREF Alternatives • Switch some to Fidelity? • Any investment similar to TIAA Real Estate? • Switch some to Met Life? • Any investment similar to TIAA Real Estate?

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