HUMAN RESOURCES at MIT

Retirement Plan Income

Social Security

As you approach retirement, you should review your Social Security benefits. Information is available at (800) 772-1213, www.ssa.gov, and from your local Social Security office.

Generally, you should apply for your Social Security benefits approximately 3 months before you want to commence benefits. Even if you do not want to commence benefits, you should sign up for Medicare Part A (Hospital Insurance) 3 months before you reach age 65. You do not need to enroll in Medicare Part B (Medical Insurance) if you are still working at MIT and are covered by a group health insurance plan.

Taxes
A portion of your Social Security benefit may be taxable as regular income. You may elect to have income taxes withheld from your Social Security payments.

Basic Retirement Plan

Your benefit payments may begin at any time after your employment at MIT ends or you reach normal retirement age (65) and work no more than half-time. Federal law requires that payments begin by the later of:

  • the April 1st following the year you attain age 70½; or
  • the April 1st following the year your MIT employment ends.

Your benefit is paid monthly for as long as you live. This payment form is known as an annuity. You may choose to have annuity payments continue after your death to your survivor(s). The types of annuities available are:

Single Life Annuity Option
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 Option
Payments are made to you for as long as you live. Upon your death, payments continue to a survivor you designated when payments begin. You decide how much will be continued to your designated survivor. Your designated survivor's payments continue for as long as the survivor lives. This designated survivor is known as your contingent annuitant.

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 election will reduce the amount of your monthly lifetime annuity payment.

Period Certain
To either a single life annuity or a joint life annuity, you may add the requirement that payments 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).

If you are married when benefit payments begin, your spouse must consent in writing to your election of this option. This option will reduce the amount of your monthly lifetime annuity payment.

Amount of Your Benefit
To request a calculation of your benefit or for more information, contact us.

Taxes
The full amount of annuity payments is generally taxable as regular income upon receipt. You may elect to have income taxes withheld from your annuity payments.

See an overview of the Basic Retirement Plan.

Supplemental 401(k) Plan

Your benefit payments may begin at any time after your employment at MIT ends or you reach normal retirement age (59 1/2) and work no more than half-time. Federal law requires that payments begin by the later of:

  • the April 1st following the year you attain age 70½; or
  • the April 1st following the year your MIT employment ends.

Lump Sum
You determine the amount of the withdrawal. You may receive your withdrawal as a cash payment or you may roll over the withdrawal amount to either a Traditional IRA or to another retirement plan.

Series of Scheduled Payments (Systematic Withdrawal Plan)
You may elect to have a specific dollar amount payable over a specific time period, such as 10 or 20 years. You receive payments automatically, based on the frequency you select. Generally, you are able to change the amount and frequency of payments.

Monthly Lifetime Income (Annuity)
Annuities are available through MIT’s preferred providers:

  • A fixed-income annuity provides a level income payment. Fixed Annuities are available through MetLife and The Hartford.
  • A variable income annuity provides payments tied to the performance of the annuity’s underlying investments. Variable Annuities are available through TIAA-CREF and The Hartford.

Taxes
Most or all of your benefit is taxable as regular income upon receipt. You may elect to have income taxes withheld from your systematic withdrawal and annuity payments. Federal law requires that taxes be withheld from lump sum payments.

See an overview of the Supplemental 401(k) Plan.

Need More Information?

If you need additional information, please contact us.

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