Options When You Leave U-M

1. Leave your money where it is.

By leaving the accumulations in your U-M retirement savings plan, you postpone paying taxes on the contributions and earnings until you decide to take a distribution at a later date. The accumulations will continue to experience the investment performance of your chosen funds. In addition:

  • You will have access to the many services TIAA and Fidelity offer to participants such as free publications, workshops, individual counseling, and their expert investment of your funds.

  • You can transfer your money to available funds within your TIAA or Fidelity account.

  • You can transfer money between TIAA and Fidelity.

2. Rollover your accumulations.

You may rollover your contributions and earnings to an IRA or to another eligible retirement plan at any age once you have retired or terminated employment. University contributions and earnings may be rolled over at age 55 or older once you have terminated employment, or at any age as an official University of Michigan retiree (see SPG 201.83). However, you may lose important tax benefits, such as the exemption to the IRS early withdrawal penalty. Consult with a qualified tax advisor. See Rollovers and Direct Transfers for details.

3. Take a cash withdrawal.

Partial, total, and systematic cash withdrawals allow you to receive income only as you need it and provide a high degree of flexibility. Your remaining accumulations continue to be tax-deferred until you take a distribution, and will continue to experience the investment performance of your chosen funds. See Cash Withdrawals and Loans for details. Keep in mind the following:

  • Income tax is due on cash withdrawals.

  • Your contributions and earnings are available for cash withdrawal at any age once you have terminated employment with the University.

  • University contributions and earnings are available for cash withdrawal at age 55 or older once you have terminated employment, or at any age as an official University of Michigan retiree (see SPG 201.83).

4. Start a lifetime or fixed-period annuity with TIAA.

There is absolutely no requirement that you must choose an annuity from TIAA. However, when you leave your employment with the university, you may choose to receive a lifetime or fixed-period annuity from TIAA at any age. The amount of the annuity will be calculated based on variables such as your life expectancy, your age at the time the annuity option is taken, and whether a spouse-survivor option is chosen. Ask TIAA to calculate various scenarios for you; they will prepare the income projections at no charge. Alternatively, you may create your own custom income illustrations at the TIAA website.

5. Take required minimum distributions.

TIAA and Fidelity pay you the minimum amount of income you are legally required to take each year by the IRS under this payment program. The balance of your accumulations remains tax-deferred and continues to experience the investment returns of your chosen funds.