MIT Retirement Programs

Ellen Weiss

MIT's retirement benefits can help you build long-term savings and provide you with sources of income when you retire from the Institute. Both the MIT Basic Retirement Plan and the MIT Supplemental 401(k) Plan provide opportunities for you to plan for your future.

The Basic Retirement Plan is a defined benefit plan that provides you with monthly lifetime income at retirement. MIT pays the full cost of the Plan and enrollment in the Plan is automatic. You are vested in the Basic Retirement Plan after you are employed by MIT for five years.

The Supplemental 401(k) Plan is a voluntary plan that allows you to contribute a percentage of your pay. MIT matches your contributions up to 5% of your pay. Federal law imposes annual dollar limits on your contributions: $14,000 for 2005 if you are below age 50 and $18,000 if on December 31 st you are age 50 or older. The dollar limit will increase to $15,000 (under age 50) and $20,000 (age 50 or older) in 2006. Similarly, it is important to note that federal law also limits the pay that can be considered for pension plans, including 401(k) Plans. In 2005, MIT considers only the first $210,000 of pay you receive. You are always 100% vested in all 401(k) contributions made by you and MIT.

With the increased need for retirement planning, it is important to know that the MIT Retirement Programs Office offers retirement counseling. Our goal is to assist faculty in making informed decisions about retirement.

It is never too early to learn about the MIT retirement plans. The amount you contribute to the 401(k) Plan and the investments you choose can make a difference, over time, in your retirement assets. It is also important to understand investment diversification, investment risk, and the expenses associated with different investment options. As you approach retirement, investment decisions you made earlier may need to be reevaluated. The Retirement Programs Office counselors and Paul Gunning, a Fidelity Investment Counselor, are available for one-on-one counseling.

"When can I afford to retire?" and "When I retire, what benefit options are available?"

Invariably our response is contact us. Our retirement counselors are available to provide you with information that will help you make informed decisions.

Are you within five years of retiring? You may want to meet with a retirement counselor to discuss the full range of distribution options available under both plans and retiree health and welfare benefits. Our office can provide projected estimates of lifetime income options from both the Basic Retirement Plan and the 401(k) Plan.

Have you decided to retire? It is important to meet with a Retirement Counselor to discuss payment options from the Basic Retirement Plan and the various distribution options from the 401(k) Plan. Our counselors will help guide you through Social Security, retirement income strategies, and how benefits from the MIT retirement plans can be structured to meet your individual needs.

MIT Retirement Counselors are located at the Benefits Office in E19-215 and can be reached at 617-253-4272.

Paul Gunning, the Fidelity Representative, is also at the Benefits Office on Tuesdays, Wednesdays, and Thursdays. To meet with Paul, please call him directly at 617-258-8872.

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