Income Options in Retirement


To provide income after retirement, the university currently makes a 10% employer contribution based on eligible earnings to a defined contribution retirement plan when you make a 5% contribution. You direct the investment of these contributions to your choice of four retirement vendors: Fidelity, TIAA-CREF, and Vanguard. The accounts are portable and you are immediately vested.

In addition, Federal law provides that USC employees participate in Social Security. Social Security benefits should be considered part of retirement income.

To compare your post-retirement income with your pre-retirement income, adjust your vendor’s annuity illustration to reflect any funds you have outside the vendor, Social Security payments, cessation of Social Security and Medicare taxation on your salary, cessation of the 5% salary contribution towards your retirement fund, and any changes in your expenses after you retire. A professional can advise you what percentage of pre-retirement income is an appropriate goal for post-retirement income.

To build even higher income for retirement years, under current law individuals can make additional pretax contributions to the Supplemental Retirement Plan up to the IRS limit. Current provisions are available on the website for USC Benefits.

For details on your individual situation, contact Keri Marroquin, Benefits Retirement Navigator, at (213)821-4572 or e-mail kmarroquin@hr.usc.edu.

DRAWING ON RETIREMENT ACCOUNTS AND SOCIAL SECURITY

When you have retired from USC, you may begin to receive income on your retirement savings. While distributions are taxable at the time they are paid, if you are over 59.5 there will be no 10% early distribution tax penalty applied to the distributions. If you continue to work beyond age 59.5, you may take a distribution from your Supplemental Retirement Account balances while employed, under current policies.

If you have retired and been invited back for part-time service, you may nevertheless have access to all your retirement funds if the following criteria are met: you are age 59.5 or older, not tenured or have submitted resignation from tenure, and are working 50% or less.

Under current law, you may begin collecting Social Security benefits as early as age 62, even if working. Since there are several factors to consider, you should contact Social Security in advance to discuss your personal situation to maximize your benefit.

To obtain an estimate of future Social Security benefits, you may create an online account. Once you have an account, calculators are available to assist you in evaluating taking your distributions before, at, or after your full retirement age.

Last updated August 14, 2017