At least six months before you retire, you should meet with an MIT retirement benefits counselor to clarify your understanding of all your benefits options.
In particular, you'll want to review the income you can expect to access at retirement, which might include
As you approach retirement, find out what you can expect to receive from Social Security. Review your benefits at Social Security Online, by calling (800) 772-1213, or by visiting your local Social Security office.
MIT Pension Plan (also known as a Basic Retirement Plan)
Your benefit payments may begin at any time after your employment at MIT ends. Federal law requires that payments begin by April 1 following the year you attain age 70½ or April 1 following the year your MIT employment ends — whichever is later.
The payments from your retirement plan are generally taxable as regular income, so consider having income taxes withheld.
Your benefit is paid monthly for as long as you live.
Pension Payment Options
- Single Life Annuity
Payments are made to you for as long as you live. After your death, no payments are made to your survivors. Since no payments are made to your survivors, this option provides the largest monthly lifetime income. If you are married when benefit payments begin, your spouse must consent in writing to your election of this option.
- Joint Life Annuity
Payments are made to you for as long as you live. Upon your death, payments continue to the survivor you designated when payments began. (This designated survivor is also known as your contingent annuitant.) You decide how much will be paid to your designated survivor and those payments continue for as long as that person lives. If you are married when benefit payments begin, you must elect a joint life annuity with at least 50% of your benefit to be continued to your spouse, unless your spouse consents in writing to another option. This will reduce the amount of your monthly lifetime annuity payment.
- Period Certain
You may specify that payments from the Single Life Annuity or, if you were hired before July 2, 2012, the Joint Life Annuity be made for a minimum number of years. This minimum payment period, known as a period certain, may not exceed your life expectancy (or the joint life expectancy of you and your joint annuitant). This option will reduce the amount of your monthly lifetime annuity payment. If you are married when benefit payments begin, your spouse must consent in writing to your election of the period certain option.
Amount of your benefit
Use the pension modeler in PensionConnect to determine the amount you can expect to receive from your Pension Plan.
If you are rehired after starting your pension
If you started your pension benefit and then return to work at MIT, your pension payments will continue while you are working and any new accruals you receive while re-employed in a benefits-eligible position may be subject to an actuarial offset that reduces the value of your future accruals.
Members of collective bargaining units
All plan provisions are subject to the terms of your collective bargaining agreement.
MIT Supplemental 401(k) Plan
The MIT Supplemental 401(k) Plan is often called simply the MIT 401(k) Plan. Payments from your MIT 401(k) Plan may begin at any time after your employment at MIT ends (subject to any applicable penalties) or you reach age 59½ and work 50% or less of the normal full-time work schedule. Federal law requires that payments begin by April 1 following the year you reach age 70½ or April 1 following the year your MIT employment ends — whichever is later.
Taxes on payments from your retirement plan vary, depending on the type of contribution you make. If you make pre-tax contributions, your contributions are not taxed, but the payments from your retirement plan are generally taxable as regular income upon receipt. You may also opt to have income taxes withheld.
If you make Roth post-tax contributions, the payments from your retirement plan will not be taxed, so long as your payments begin after age 59½ and five years after your first Roth contribution.
Annuity Payment Options
- Single Lump Sum
You may receive your withdrawal as one cash payment or you may roll over the withdrawal amount to either a traditional IRA or to another qualifying retirement plan.
- Systematic Withdrawal Plan
The Systematic Withdrawal Plan is a series of scheduled payments. You may opt to receive a specific dollar amount over a set time period, such as over 10 or 20 years. Payments are sent automatically, based on the frequency you select. Generally, you are able to change the amount and frequency of payments.
- Monthly Lifetime Income Annuity
You can withdraw all or a portion of your account to purchase an annuity.