The amount of money you will need to live comfortably in retirement depends upon your future expenses and goals for retirement. In order to meet those goals, most people will need to save in addition to any employer and government benefits. Harvard provides several options that let you save additional money for retirement.
Note: Retirement Program changes completed
Harvard's changes to the investment options and management available through the retirement programs were completed as of September 22, 2020, including a new simplified investment lineup where all plan contributions are directed and a single platform managed by TIAA at TIAA.org/harvard for retirement account administration and recordkeeping. All participants now have an account on the TIAA platform and existing fund balances at Fidelity and Vanguard have been transferred to these accounts. Learn more about the changes.
Tax-Deferred Account (TDA)
With two contribution options, TDA allows you to save for retirement and reduce your taxable income – now or in retirement. You may choose either contribution option or divide your contributions between them:
- With the Traditional option, you make contributions before taxes, reducing your taxes today, and your savings aren’t taxed until you withdraw funds.
- With the Roth option, you make contributions after taxes, your savings grow tax-free and future withdrawals in retirement are tax-free.
You decide how much to save, up to the plan limits ($19,500 for 2020, with higher limits for those age 50+), and how to invest from among Harvard’s menu of investment options, including mutual funds and brokerage accounts. Your choices will depend on your personal goals, risk tolerance and knowledge of investing. If you make no choice, your TDA will be directed to Harvard's default investment, a Vanguard target date fund.
You can sign up for the TDA as soon as you start working and may change the amount of your contribution and your investment choice at any time. The money in your TDA is always yours.
New faculty and administrative/professional staff who make no election are automatically enrolled in the TDA Plan (Traditional option) after 60 days of employment, with an initial contribution rate or 3% of salary deducted from pay before taxes that increases by 1 point each January, up to 10% (not to exceed federal contribution limits).
Who it’s for:
Generally, if you are a University faculty or staff member, you are eligible to participate in the TDA Plan. New faculty and staff will receive information/enrollment package by mail.
To learn more, we invite you to begin with this recorded TDA overview and review the TDA Information Sheet and the TDA Brochure (union staff) or the TDA Brochure - Auto-Enrollment (for faculty and nonunion staff). View a comparison of some of the features of the Traditional and Roth contribution options.
457(b) Deferred Compensation Plan
Allows certain high-earning faculty and staff to set aside a tax-deferred portion of their salary, in addition to TDA deductions.
Who it’s for:
Employees whose base salary is at least $200,000 (for 2020) and reside in certain states are eligible to enroll in this plan. If you are eligible, you will receive enrollment information from the Harvard University Retirement Center (HURC).