Benefits Plans - Retirement Savings Plans: Cash Withdrawals -
minimum distribution at age 70½

The IRS requires that you begin receiving  distributions from your retirement fund by April 1 of the calendar year following the calendar year you reach age 70½ once retired or terminated. If you are already over age 70½ when you retire or terminate, then you must take a distribution by April 1 of the following year.

Generally, 403(b) accumulations as of December 31, 1986 are grandfathered under a special rule. Distributions of these amounts do not have to begin until age 75 once retired or terminated. This grandfathering is forfeited for those accumulations you rollover to an IRA.  This special provision on grandfathering does not apply to qualified plans under Internal Revenue Code sections 401(a), 403(a), and 401(k).

When you elect the minimum distribution income plan, TIAA-CREF and Fidelity will calculate and pay you the minimum amount of income you are legally required to take each year. The balance of your accumulations remains tax-deferred and continues to experience the investment returns of your chosen funds. 

This plan allows you to meet federal minimum distribution requirements without having to request payments each year or start a lifetime annuity. This may be an appropriate income plan if you want to preserve your accumulations as long as possible and maximize benefits for your beneficiary(ies).  Keep in mind that there may be potential tax costs when these assets are passed on to your beneficiaries as they may be subject to both estate and income taxes.


The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.