What to Do With Your University of Rochester 403(b) When You Retire or Change Jobs

If you are a University of Rochester professional preparing to retire or leave the University, one of the most important financial decisions you will face is what to do with your TIAA 403(b).

This choice affects more than where your money sits. It influences your taxes, how easily you can access your savings, and how much flexibility you have when building a reliable retirement income plan.

Before making any changes, it helps to understand how the University of Rochester plan works and why your options here are different from what you might find elsewhere.

1. What Makes the U of R 403(b) Unique

Your University of Rochester retirement plan is administered through TIAA and includes two types of contributions:

• University Direct Contributions – money the University contributes on your behalf

• Voluntary Contributions – money you defer from your paycheck

Both grow tax-deferred, and withdrawals in retirement are generally taxed as ordinary income.

What matters most is that the U of R plan has its own rules about when and how you can access your money. Those rules become especially important when you are deciding whether to keep your savings in the plan or move them elsewhere.

2. When You Can Access Your Money

This is where many University of Rochester professionals start to feel uncertain, because access depends on both your age and your employment status.

Here are the key situations when your 403(b) money becomes available:

If You Leave the University

You can withdraw both University contributions and voluntary contributions.

If You Are Still Working at U of R

• Age 59½: You can access voluntary contributions for any reason

• Age 70½: You can access University contributions for any reason

Special Circumstances

• Disability: Withdrawals may be allowed if IRS disability rules are met

• Birth or Adoption: Up to $5,000 can be taken penalty-free within one year

• Hardship: Allowed before 59½ for limited reasons such as medical bills, tuition, or preventing foreclosure

These rules matter, but for many University of Rochester employees, one provision stands out above the rest.

3. The Rule of 55 and Why It Matters at U of R

If you leave the University in or after the year you turn 55, the U of R 403(b) allows withdrawals without the 10 percent early withdrawal penalty. You still pay ordinary income tax, but you avoid the additional penalty.

This can be especially valuable if you plan to retire in your mid or late 50s and need income before age 59½.

There is one important catch.

If you roll your 403(b) into an IRA, this benefit disappears. The Rule of 55 applies only to the U of R plan.

For some individuals, this single rule is the reason they keep part of their savings in the plan for a few more years rather than moving everything immediately.

4. Your Four Options When You Leave the University

When you retire or change jobs, you generally have four choices for your 403(b). Each comes with tradeoffs.

1. Leave the Money in the U of R Plan

Advantages

• Maintains access to the Rule of 55

• May offer strong creditor protection

• Allows you to stay with familiar TIAA investment options

Considerations

• No new contributions

• Limited investment flexibility

• Fees may be higher than alternatives

This option can make sense if you expect to use the Rule of 55 or need near-term access to your savings.

2. Roll It Into a New Employer’s Plan

Advantages

• Consolidates retirement accounts

• May delay required minimum distributions if you keep working past age 73

Considerations

• Investment options and fees depend on the new employer’s plan.

This option is often best for those who value simplicity and plan to continue working.

3. Roll It Into an IRA

Advantages

• Much wider range of investment choices

• Greater control over fees

• Easier coordination across accounts

• Roth IRAs have no lifetime RMDs, which can help with tax planning.

Considerations

• You lose access to the Rule of 55

• Creditor protection may be weaker than in an employer plan

This option often works well for those who value flexibility and want to incorporate Roth strategies into their retirement plan.

4. Cash Out (Not Recommended)

Advantages

• Immediate access to funds

Considerations

• Large tax bill

• Possible 10 percent penalty if under 59½ and not eligible for Rule of 55

• Loss of long-term growth.

For most people, this option creates lasting damage to retirement security.

5. How to Make the Right Choice

For University of Rochester professionals, deciding what to do with a 403(b) is rarely just about a rollover. It is part of a larger retirement income strategy.

What matters most is how the decision fits into the bigger picture:

• Whether you need penalty-free access at age 55

• How much investment flexibility you want

• What you are paying in fees compared to an IRA

• How your 403(b) integrates with Social Security, pensions, and other assets

• How withdrawals should be timed to manage taxes over multiple decades

Small choices here can have meaningful long-term effects on taxes, income stability, and retirement confidence.

6. Why Professional Guidance Helps

If you are preparing to retire or leave the University, what you do with your 403(b) will shape your financial flexibility for years to come.

A fiduciary advisor can help you:

• Decide whether to keep money in the U of R plan or roll it out

• Understand how the Rule of 55 fits into your retirement timeline

• Coordinate your 403(b) with IRAs, Roth strategies, and Social Security

• Build a retirement income plan that supports your lifestyle and tax goals

Many University of Rochester professionals have done an excellent job saving. The next step is making sure those savings work just as hard in retirement.

Final Thought

The U of R TIAA 403(b) offers unique features that can be valuable when you retire or change jobs. At the same time, an IRA can open up new opportunities for investment flexibility and tax planning.

The right choice depends on your age, your goals, and how you want to build your retirement income plan. With significant savings, small missteps can mean thousands lost to taxes or missed growth. A clear strategy helps you move into the next chapter with confidence.

Ready to Align Your 403(b) Decision With a Clear Retirement Plan?

We will review your options, the tax implications, how the Rule of 55 applies to you, and how your 403(b) fits into your overall income plan so you can move forward with clarity.

Schedule your Retirement Strategy Session

The Pitti Group Wealth Management, LLC (“The Pitti Group”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where The Pitti Group and its representatives are properly licensed or exempt from licensure.