Income in Retirement

When you retire, you may receive income benefits from more than one source depending on choices you made throughout your career. From personal savings to OU’s retirement plans and Social Security, it’s important to plan your income and expenses as a retiree.

Investment Accounts

You’ve been getting ready for retirement by saving and investing throughout your career in OU’s 401(a) Defined Contributions plan and the 403(b) 457(b) Voluntary Retirement Savings plans. Now it’s time to decide how you’ll use this savings to build the retirement you want. Human Resources and Fidelity are here to help. 

Contact Fidelity to request an estimate of the retirement benefits you expect to receive as distributions from your invested savings. You can also request a retirement packet of the forms and information needed to begin retirement benefits. You can obtain an income estimate by logging on to Fidelity’s Net Benefits website. Create a user ID and password and locate the income estimating tools.

You may have an option to use only some or even none of your retirement savings, but keep in mind that federal tax regulations may subject you to tax penalties if you are age 70 ½ or approaching age 70 ½ and have not started receiving retirement income. Fidelity can provide you with more information.

You may also have older investment savings accounts with TIAA-CREF from before 2011. Contact TIAA-CREF directly to review your balance and income options for these accounts. 

 

Taxation of Benefits

Federal and state taxes will be withheld from these retirement benefits.  If you make a withdrawal before age 59½ from your retirement accounts you may be subject to a tax penalty, paying an additional 10%. Contact Fidelity for more information.

Cash Withdrawal Policy

Cash withdrawal is available following termination or retirement. If you would like to receive a lump-sum payment from your retirement funds, you must request, complete and return the appropriate form to Fidelity. If you have funds in the TIAA Traditional fund, restrictions apply if the withdrawal request is received after 120 days from your last day at work. You should consult a Fidelity representative or personal financial planner before choosing a cash withdrawal.

Transfer Policy

OU permits the transfer of account balances to other retirement investment accounts such as a private IRA or a Roth IRA.

Oklahoma Teachers' Retirement System (OTRS) Benefits

Early in your career you may have made a choice to contribute a portion of your paycheck to the Oklahoma Teachers' Retirement System (OTRS). You can find the contribution noted on your paycheck earnings statement if you're not sure. Check the OTRS eligibility rules here.

 OTRS provides a defined benefit while you're in retirement, like a pension plan. It's a life-time, guaranteed dollar amount. The amount of your benefit is based on the formula below. You can get an estimate of your benefits at any time by contacting the Oklahoma Teachers Retirement System.

Full Years of Service x 2% x Average Total Compensation for your five highest-paid years = Your OTRS Retirement Benefit

OTRS Retirement Date and Disbursement

If you're participating in Oklahoma Teacher's Retirement System (OTRS), your university retirement date may be different than your OTRS retirement date. Your OTRS retirement date is your last day of active work rounded to the nearest 1st day of the month. You should receive your first OTRS payment around the 1st of the month following your OTRS retirement. For example, if your last day of work is July 15, your effective OTRS retirement date should be August 1, and your first OTRS retirement check will be mailed or direct deposited around September 1.  

State and federal taxes will be withheld from your OTRS retirement check, and you are allowed a state exemption each year. You will receive the proper form explaining your tax options when you receive your blank contract and other forms from OTRS.

Note: If you miss any of the deadlines in the OTRS retirement process, OTRS will delay your retirement date which will delay the receipt of your first payment. See the timeline on the OTRS website for more details.

Social Security Benefits

At least 90 days before you retire, you should contact your local Social Security Administration office for an appointment to review your records and learn about available benefits. An early appointment may save you time later in the retirement process and allow the office time to review your records.

The Social Security Administration requires proof of your birth before you can receive Social Security benefits.  If you do not have a birth certificate, you should contact them to determine what documents are acceptable.

For a retirement benefits estimator and other things to consider such as Medicare, disability, and more, visit the Social Security Retirement Planner.

Did You Know?

Assessing your financial future is the most important component of considering retirement. Contact the necessary resources to make plans, starting with OTRS, Social Security, and Fidelity.