- Log into the TIAA website, tiaa.org/umich, with your PIN
- Select the tab at the top of the page called, “Manage My Portfolio”
- Page down to select “Request a Withdrawal”
- Complete the online information to initiate your withdrawal or rollover. Please note that TIAA has established a lifetime limit of $50,000 in withdrawals or rollovers that may be requested using this online method.
- Disregard the “Employer Authorization” on the form asking you to obtain a signature from the Benefits Office. Do not mail, FAX, or bring your forms to the Benefits Office for this signature.
- Call the SSC Contact Center at (734) 615-2000 and request that an electronic authorization be sent to TIAA or Fidelity for your withdrawal or rollover request.
- The University of Michigan will electronically supply your date of termination and “Employer Authorization” to TIAA or Fidelity within 24 hours that will approve your withdrawal or rollover.
Please be advised that the University of Michigan does not sign paper forms to approve Basic Retirement Plan distributions for security and compliance reasons. The electronic approval process replaces the need to obtain a signature on the form. This will also increase the speed and efficiency with which TIAA or Fidelity will process your request. If a telephone service representative at TIAA or Fidelity indicated obtaining the employer signature was mandatory, they have done so in error. Disregard those instructions.
Review the withdrawal considerations if you make a withdrawal from your 403(b) SRA while you are a current U-M employee.
| Withdrawal Considerations | Disability | Hardship | Age 59½ | SRA Loan |
|---|---|---|---|---|
| Generally subject to IRS 10% early withdrawal penalty? | No | Yes | No | No |
| Income tax due for tax-deferred SRA? | Yes | Yes | Yes | No |
| Income tax due for after-tax-Roth SRA? | Qualified distributions: No Yes if it is not qualified | Qualified distributions: No Yes if it is not qualified | Qualified distributions: No Yes if it is not qualified | No |
| Can you still contribute to the Basic Retirement Plan? | Yes | Yes | Yes | Yes |
| Can you still contribute to the 403(b) SRA? | Yes | Yes | Yes | Yes |
| Requires Benefits Office approval? | Yes | No | No | No |
| Do you have to repay it? | No | No | No | Yes |
| How much can you access? | Entire 403(b) SRA accumulation | Contributions only, earnings are not available | Entire 403(b) SRA accumulation | 45% of TIAA 403(b) SRA, 50% of Fidelity 403(b) SRA |
- Qualified distributions from the after-tax Roth 403(b) SRA are generally tax-free when made after a 5-taxable-year period of participation and when it is: 1) made on or after the date you attain age 59½, or 2) made after your death, or 3) your being disabled as defined by Internal Revenue Code (IRC) Section 72(m)(7). If the distribution does not meet these criteria it is not qualified and income tax is due on the earnings. However, income tax is not due on the contributions of a nonqualified distribution since those amounts were subject to taxation when deducted from your paycheck.
- A 10% penalty generally applies to withdrawals made prior to age 59½(with some exceptions) and generally applies to nonqualified distributions of after-tax Roth 403(b) SRA amounts. Consult with a qualified tax advisor for information on taxation of distributions and the IRS early withdrawal penalty.
- If you default on repayment of the 403(b) SRA loan, income taxes are due and an IRS early withdrawal penalty may apply if you are under age 59½.
403(b) SRA Disability Withdrawal
If you have a 403(b) SRA with TIAA or Fidelity, or both, you may withdraw your accumulations (up to all contributions and earnings) while you are still working for the university if you become disabled. The Internal Revenue Code defines an individual to be disabled if they are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or to be of long-continued and indefinite duration. Individuals applying for a disability withdrawal must provide verification of disability to the Benefits Office, such as proof of Social Security disability benefit entitlement. Income tax will be due on the amount you cash out (except for qualifying distributions of after-tax Roth 403(b) SRA amounts). The IRS 10% early withdrawal penalty does not apply to a disability withdrawal.
To arrange for a disability withdrawal, contact TIAA (800) 842-2252 or Fidelity (800) 343-0860 to request an SRA Disability Withdrawal Application. After completing your sections of the application, mail, fax, or deliver the application to the Benefits Office along with documentation of your disability status. The Benefits Office will complete the employer authorization section and forward the application to your investment carrier within three business days.
403(b) SRA Hardship Withdrawal
You may be eligible to withdraw your contributions (earnings are not available) if you have a 403(b) SRA with TIAA or Fidelity Investments due to a financial hardship. Income tax is due on the amount you cash out (except for qualifying distributions of after-tax Roth 403(b) SRA amounts) and cash withdrawals made prior to age 59½ are generally subject to an IRS 10% early withdrawal penalty. A hardship must meet two requirements, per regulations issued by the U.S. Treasury Department.
First, you must have an immediate and heavy financial need that falls under one of the following six categories determined by the IRS:
- Expenses for medical care that would be tax-deductible under Internal Revenue Code (IRC) section 213(d), for the employee, spouse, or dependents;
- Costs directly related to purchase of the principal residence (excluding mortgage payments) of the employee;
- Payment of tuition, related educational fees, and room and board expenses for the employee, spouse, or dependents for the next 12 months of post-secondary education;
- Payments necessary to prevent eviction of the employee from the employee’s principal residence or foreclosure on the mortgage of that residence.
- Payments for burial or funeral expenses for the employee’s deceased parent, spouse, children, or dependents;
- Expenses for the repair of damage to the employee’s principal residence that would qualify for the casualty deduction under IRC Section 165 (determined without regard to Section 165(h)(5) and whether the loss exceeds 10% of adjusted gross income).
- Expenses and losses (including loss of income) incurred by the employee on account of a disaster declared by the Federal Emergency Management Agency (FEMA) under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, provided that the employee's principal residence or principal place of employment at the time of the disaster was located in an area designated by FEMA for individual assistance with respect to the disaster.
Second, the hardship withdrawal cannot exceed the amount necessary to relieve the financial need and it cannot be satisfied from other resources reasonably available to you (“Safe Harbor method”).
To arrange for a 403(b) SRA hardship withdrawal, contact TIAA (800) 842-2252 or Fidelity (800) 343-0860 to speak with a counselor to determine if you are eligible. If you meet the eligibility criteria, TIAA or Fidelity will send you an application for the hardship withdrawal. Return your completed forms to the vendor with the appropriate documentation demonstrating the amount of the need and that it meets one of the six qualifying expenses.
403(b) SRA Age 59½ Withdrawal
If you have a 403(b) SRA with TIAA or Fidelity, or both, you may withdraw your accumulations (up to all contributions and earnings) while you are still working for the university starting at age 59½. Income tax will be due on the amount you cash out (except for qualifying distributions of after-tax Roth 403(b) SRA amounts). TIAA and Fidelity Investments are required by federal regulations to withhold 20% of the amount of the withdrawal for income tax purposes. There is no IRS 10% early withdrawal penalty on a withdrawal made at or after age 59½.
To arrange for a withdrawal, contact TIAA (800) 842-2252 or Fidelity (800) 343-0860 and request a 403(b) SRA withdrawal application.
457(b) Age 59½ Withdrawals
You may withdraw any portion or your entire accumulations while you are a current member of the faculty or staff at age 59½ or older for any reason. Income tax will be due on the amount you cash out (except for qualifying distributions of after-tax Roth 457(b) amounts). You can rollover this withdrawal if you wish. To initiate a 457(b) Age 59½ Withdrawal, contact TIAA (800) 842-2252 or Fidelity (800) 343-0860 for a withdrawal application.
457(b) One-Time Withdrawal
- The total account balance (not counting rollovers you made into the plan) is no more than $5,000;
- No amount has been deferred under the plan during the two-year period that ends on the date of distribution; and
- No previous distribution was taken under this special provision.
Income tax will be due on the amount you cash out (except for qualifying distributions of after-tax Roth 457(b) amounts), but there is no additional tax penalty. You can rollover this withdrawal if you wish.
To initiate a 457(b) One-Time Withdrawal, contact TIAA (800) 842-2252 or Fidelity (800) 343-0860 for a withdrawal application.
Required Minimum Distributions (RMDs) are the minimum amounts you must withdrawal from your retirement accounts each year once you have retired or terminated employment and reach a certain age. Note the following:
If You Reach Age 70½ by December 31, 2019
- April 1 of the year after you reach age 70½ once you have retired or terminated employment; or
- If you are already over age 70½ at the time of your retirement or termination, you must begin RMDs by April 1 of the following year.
If You Reach Age 70½ in 2020 or Later
You have to start taking your RMDs from your retirement plan by the later of:
- April 1 of the year after you reach age 72 once you have retired or terminated employment; or
- If you are already over age 72 at the time of your retirement or termination, you must begin RMDs by April 1 of the following year.
RMDs apply to the U-M Basic Retirement Plan, the 403(b) Supplemental Retirement Account and the 457(b) Deferred Compensation Plan. It also includes assets from another retirement plan or IRA that you have rolled into any of the U-M plans.
Age 75 Grandfathering
A special rule allows you to postpone distributions of 403(b) accumulations as of December 31, 1986 until age 75 once retired or terminated. This grandfathering is forfeited for accumulations you rollover to an IRA. This special provision on grandfathering does not apply to other plans such as a 401(a), 403(a), or 401(k).
If You Are Still Working at U-M
You can postpone RMDs attributable to your U-M retirement plans while you are still working for the University of Michigan. However, assets in another retirement plan outside of the U-M plans or an IRA generally have to begin by April 1 following the calendar year you reach age 72 (age 70 ½ if you are already age 70 ½ by December 31, 2019) even if you are still employed at U-M.
You need to be employed by U-M and have salary and wages reported on a University of Michigan W-2 that are subject to federal income taxation in order to postpone RMDs for your U-M plan assets. You do not have an employment relationship that allows you to postpone the RMD requirement if you are not receiving salary or wages reported on a University of Michigan W-2, even if you are performing services. Consult with a tax advisor to determine if you need fulfill your RMD requirements.
Your Year of Retirement or Termination
Your year of retirement or termination is the final calendar year in which you received W-2 reported salary or wages from U-M. This affects when you must begin taking RMDs.
- Your faculty appointment ends Dec. 31, 2022, and you are 78 years of age.
- Your retirement begins Jan. 1, 2023.
- Your date of retirement is Dec. 31, 2022, since it is the last year you received W-2 salary and wages from U-M.
- Jan. 1, 2023 is not your date of retirement, but your first day as a retiree. You cannot postpone RMDs if you do not have salary and wages for 2023.
- You must begin taking RMDs no later than April 1, 2023.
Disclaimer
The above is an overview of federal regulations on retirement plan minimum distribution requirements and is based on the university’s current understanding of highly complex Internal Revenue Code (IRC) and U.S. Treasury Department regulations. It is provided for general informational purposes only and is not intended to constitute tax or legal advice. Not all possible scenarios are covered by this information and it is the responsibility of each plan participant to comply with federal tax regulations. Questions or concerns regarding RMD requirements should be addressed with a tax adviser.
Accumulations in TIAA Traditional in the Basic Retirement Plan are not available for lump-sum cash withdrawals, rollovers, or transfers. These transactions occur over a nine-year period through a process called the TIAA Traditional Transfer Payout Annuity. Contact TIAA for more information.
Income tax is due on withdrawals, and a 10% penalty generally applies to withdrawals made prior to age 59½ (with some exceptions). Qualified distributions from the after-tax Roth 403(b) SRA and from the after-tax Roth 457(b) are generally tax-free when made after a 5-taxable-year period of participation and is either: 1) made on or after the date you attain age 59½, or 2) made after your death, or 3) your being disabled according to Internal Revenue Code (IRC) Section 72(m)(7). Consult with a qualified tax advisor for information on taxation of retirement plan distributions and the IRS early withdrawal penalty.
Questions About Your Benefits?
Submit your questions to the SSC Contact Center. You can also call the SSC at 5-2000 from the Ann Arbor campus, (734) 615-2000 locally, or (866) 647-7657 toll free, Monday through Friday from 8 a.m. to 1 p.m. and 2 p.m. to 5 p.m..
Limitations
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend, or terminate them. Every effort has been made to ensure the accuracy of the benefits information in this site. However, if any provision on the benefits plans is unclear or ambiguous, the Benefits Office reserves the right to interpret the plan and resolve the problem. If any inconsistency exists between this site and the written plans or contracts, the actual provisions of each benefit plan will govern.
