Accumulations (contributions plus any associated investment earnings) in the TIAA retirement account of a retiring member of the faculty or professional staff may be withdrawn, “rolled over” to an Individual Retirement Account (IRA), or left invested in the Franklin & Marshall Retirement Plan. Based on current IRS regulations, an individual who separates from service after age 59-1/2 may withdraw funds from the Retirement Plan without a tax penalty; however, normal federal income tax will be withheld when funds are withdrawn. It may be possible to withdraw funds prior to age 59-1/2 without a tax penalty if an individual is at least age 55 when employment ends. Retiring members of the faculty and professional staff are strongly advised to consult with TIAA and/or a tax specialist prior to requesting a distribution from their retirement account.
Through the Retirement Plan, faculty and professional staff have several options for receiving retirement income including:
purchasing a lifetime variable annuity with your account accumulation, which provides regular income for the retiree's life;
purchasing a joint and survivor variable annuity which provides regular income for the retiree’s life and, following the retiree’s death, provides regular income during his/her beneficiary's life;
purchasing a fixed-period annuity which provides regular payments for the period selected by the retiree;
rollover of funds to an IRA;
systematic cash withdrawals;
lump sum withdrawals;
a combination of these options.
Lifetime and joint and survivor annuities are irrevocable. Monthly annuity income will vary from year to year based on the previous year's investment performance. Any money invested in the TIAA Traditional Annuity (RA) must be withdrawn in essentially equal amounts over a 10 year period.
For participants who are married at the time benefit payments commence, distribution will be in the form of a "Qualified Joint and Survivor Annuity," unless an optional form of payment is selected, with the spouse's written and notarized consent. A Qualified Joint and Survivor Annuity is a monthly annuity paid for the retiree's lifetime, with a lifetime annuity payable to his/her spouse upon the retiree's death equal to 50% of the annuity income amount paid during the retiree's lifetime. If a participant is not married on the date benefits are to begin, the participant will automatically receive a lifetime annuity (regular payments for as long as the retiree lives), unless a different option is selected.
Participants may waive the Qualified Joint and Survivor Annuity or the lifetime annuity and select a different retirement income option during the 90-day period before the annuity is to begin.
As noted above, upon retirement individuals may leave their retirement contributions invested through the College’s Plan and TIAA. However, minimum distributions from a retiree's account generally must begin no later than the April 1st following the year in which the retiree reaches age 70-1/2. If the minimum distribution is not withdrawn, a tax penalty, in addition to normal federal tax, may be assessed. The required minimum distribution amount will vary by individual, and is based on factors such as age, life expectancy, and retirement account balance. TIAA will calculate the minimum distribution amount for any participant who is required to receive minimum distributions.
The forms, informational material, and income projections needed to make choices and to initiate distributions from your retirement account are available directly from TIAA. Those planning to retire are encouraged to contact TIAA at 1-800-842-2776 well in advance of their retirement date to discuss all options. Upon request, TIAA will provide retirement income projections, discuss tax implications and send all forms necessary to withdraw or transfer funds as applicable.