As a U-M employee, you have access to one of the most generous retirement programs in higher education. But with multiple plan types, contribution options, and eligibility rules, it’s easy to miss opportunities to optimize your financial future.
Our Ann Arbor-based team has helped many U-M employees across roles and departments, giving us deep insight into the university’s benefits and retirement system.
Beyond retirement, we can also help you plan for transitions, whether you’re changing roles within the university, retiring, or moving on to a new opportunity.
For 40 years, Mercer Advisors has been trusted to help families amplify and simplify their financial lives. As a fiduciary, we are obligated to always operate in your best interest.
We offer comprehensive wealth management through a family office-like structure, helping clients amplify and simplify their financial lives by bringing together financial planning, investment management, tax, estate, insurance, and more into one integrated offering.
Retirement Eligibility Checklist
Retirement planning is a vital aspect of financial wellness that transcends age, income level, or career stage. Whether you’re just starting your professional journey or are nearing retirement age, taking proactive steps to plan for your future can provide confidence and a comfortable retirement.
Understanding when and how you qualify for retirement is essential to planning your financial future. U-M retirement eligibility is based on your age, years of service, and appointment type.
Key steps:
403(b) and 457(b) Strategies
U-M offers robust retirement savings options through the 403(b) and 457(b) plans. Understanding how to leverage these plans can significantly impact your retirement readiness.
These general rules and guidelines apply to U-M plans:
- 403(b) Basic Retirement Plan
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- Participation: Contribute 5% of your eligible compensation; increasing or decreasing your contribution rate is not an option
- U-M Contribution: Receive a 10% contribution of your eligible compensation from U-M after a 12-month waiting period
- Investment options: Choose between TIAA and Fidelity, or split contributions
- 403(b) SRA (supplemental retirement account)
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- Determine eligibility by eligible compensation and appointment
- Make additional voluntary contributions up to IRS limits
- Choose between pre-tax and Roth options for tax diversification
- 457(b) deferred compensation plan
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- Ideal for high earners seeking additional tax-deferred savings
- Check Wolverine Access to determine how much you can contribute
- No early withdrawal penalty after separation from service
Medicare Integration
As you approach retirement, it’s crucial to understand how U-M retiree health benefits work with Medicare, the government-sponsored health care system for U.S. citizens aged 65 or over.
Timing of enrollment in Medicare is important for avoiding penalties as well as ensuring benefits.
When you’re first eligible for Medicare, U-M requires you and your eligible dependents to enroll in Parts A and B.
What to know:
- U-M retiree health benefits integrate with Medicare Parts A, B, and D
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- Part A is hospital coverage
- Part B is physician services
- Part D is prescription drug coverage
- Time your Medicare enrollment properly so you can avoid penalties
- Plan for health care and long-term care costs in retirement by taking advantage of a Health Savings Accounts (HSA), if you’re enrolled in the Consumer-Directed Health Plan (CDHP) (be sure to stop contributions six months prior to filing for Medicare to avoid taxes and penalties)
Tax Planning Tips
Optimizing your finances means optimizing your tax planning. Smart tax planning can help you keep more of your retirement income.
Navigating taxable retirement savings withdrawals, Social Security taxation, and Roth conversions can get complex. Mercer Advisors provides comprehensive oversight of your plan and portfolio can help minimize taxes in retirement.
Key considerations:
- Evaluate Roth vs. Traditional 403(b) and (457(b) contributions for tax efficiency: Roth contributions are after-tax and withdrawals in retirement are tax free; Traditional contributions are pre-tax and withdrawals in retirement incur income tax
- Plan Roth conversions during low-income years or early retirement
- Use HSAs to reduce taxable income
- Coordinate retirement withdrawals and RMDs to manage staying in lower tax, as well as help with adjusting to changing tax policies
Estate Planning and Insurance Coordination
You should have plans in place for protecting your legacy and ensuring your loved ones are cared for.
It’s never too late to start — every adult should have an estate plan. In fact, we’re such firm believers in the importance of having an estate plan that estate planning is included as part of our investment advisory fee.
We also make insurance integral to our end-to-end wealth management approach.
How Mercer Advisors Helps U-M Employees
We specialize in helping U-M employees and retirees turn complex benefits into a clear, actionable financial plan.
- Maximize your 403(b) match and supplemental plan contributions
- Coordinate TIAA and Fidelity investments into one retirement strategy
- Model retirement income based on U-M eligibility and service years
- Evaluate Roth vs. Traditional contributions for tax efficiency
- Plan Roth conversions during early retirement or low-income years
- Integrate U-M retiree health benefits with Medicare Parts A, B, D
- Estimate healthcare and long-term care costs in retirement
- Align estate plans with U-M benefits and financial goals
- Provide guidance during Open Enrollment and career transitions
Ready to Make the Most of Your U-M Benefits?
Our Ann Arbor-based team has deep experience advising U-M employees. Let’s build a financial plan that reflects your career, your benefits, and your goals.
FAQs: University of Michigan Retirement Planning
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The Basic Retirement Plan provides a 10% employer contribution when you contribute 5% of your salary, starting after one year of employment. Both your contributions and the University’s contributions are fully vested immediately — no payback required if you change employers.
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The 457(b) plan is ideal for high earners who want to save more on a tax-deferred basis. Unlike other retirement accounts, there’s no early withdrawal penalty after separation from service, regardless of age.
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The Basic Retirement Plan provides a 10% employer contribution when you contribute 5% of your salary, starting after one year of employment. Both your contributions and the University’s contributions are fully vested immediately — no payback required if you change employers.
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Your U-M retirement eligibility is based on your age, years of service, and appointment type. You can estimate your retirement eligibility date using Wolverine Access.
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You can choose between TIAA and Fidelity, or split your contributions between both. The right choice depends on your investment preferences, fees, and how your accounts coordinate with outside IRAs or your spouse’s employer benefits.
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The choice between Roth and Traditional contributions depends on your current tax bracket versus your expected tax rate in retirement. Mercer Advisors can help you evaluate both options and plan Roth conversions during early retirement or low-income years.
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Always contribute at least 5% to your Basic Plan to capture the full 10% employer match — that’s an immediate 200% return. After securing the match, consider additional contributions to the SRA or 457(b) based on your tax situation and retirement goals.
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Yes, Flexible Spending Accounts and Health Savings Accounts offer valuable tax advantages that can complement your retirement savings. HSAs in particular provide triple tax benefits and can roll over year to year.
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You can estimate your retirement eligibility date using Wolverine Access at wolverineaccess.umich.edu. Your eligibility is based on age, years of service, and appointment type.
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Visit hr.umich.edu/benefits-wellness/retirement/retirement-eligibility for detailed information on retirement eligibility and retiree health benefits. Understanding how U-M retiree health benefits integrate with Medicare Parts A, B, and D is crucial for retirement planning.
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The Mercer Advisors Ann Arbor-based team specializes in helping U-M employees coordinate TIAA and Fidelity investments into one unified retirement strategy. They can also help align these accounts with outside IRAs, brokerage accounts, and your spouse’s employer benefits.
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Mercer Advisors provides guidance during Open Enrollment and career transitions to help you make the most of your U-M benefits. We can help you evaluate health insurance options, retirement contributions, and other benefit decisions.
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The 457(b) is often better for high earners because it has no early withdrawal penalty after leaving U-M, regardless of age. However, the SRA offers Roth options for tax diversification, making it beneficial if you expect higher taxes in retirement.
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Both TIAA and Fidelity are available for your U-M retirement contributions, and you can split between them. The better choice depends on your investment preferences, fund options, fees, and how each provider fits with your overall financial plan.
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The answer depends on your age, years of service, health benefits eligibility, and retirement income needs. Mercer Advisors can model retirement income scenarios based on your U-M eligibility and service years to help you decide.
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Pre-tax contributions reduce your taxable income now, while Roth contributions provide tax-free withdrawals in retirement. Mercer Advisors can evaluate both options based on your current tax bracket, expected retirement income, and opportunities for Roth conversions during early retirement.
“Mercer Advisors” is a brand name used by several affiliated legal entities owned by Mercer Advisors, Inc., including, Mercer Global Advisors, Inc., an SEC registered investment adviser providing investment advisory and family office services; Mercer Advisors Private Asset Management, Inc., an SEC registered investment adviser providing discretionary investment management services to affiliated private funds; Mercer Advisors Tax Services LLC, a tax services and accounting firm; Heim, Young and Associates, Inc., (MA Brokerage Solutions) a broker/dealer, member FINRA/SIPC; and Mercer Advisors Insurance Services, LLC (MAIS) an insurance agency.
