September 18, 1998 

The MGH personal savings plan for retirement

Below is the second in a three-part series about MGH retirement program options available to employees. This article addresses personal savings for retirement through the hospital's tax-deferred annuity program.

Supplementing employers' retirement programs with personal savings can be critical to ensuring financial security in the retirement years. Proposed changes to Social Security make this part of a savings plan even more critical. (More information about Social Security will be available in the next article of this series.)

MGHers have an opportunity to invest funds for their retirement while saving today on their federal and now state taxes (see box below). The MGH tax-deferred retirement or annuity program, which qualifies under Section 403(b) of the Internal Revenue Code, allows participants to have retirement savings deducted from their paycheck on a pre-tax basis, reducing current taxable income. Dividend and interest income generated by the invested funds also is not taxed when earned. Taxes are paid when funds are withdrawn, usually after retirement.

The Internal Revenue Code imposes strict regulations governing the amount that can be contributed to a 403(b) tax-deferred program annually. Because these accounts are designed to provide retirement income, federal regulations make it very difficult to withdraw funds prior to retirement and impose substantial penalties on early withdrawals.

The MGH offers a broad spectrum of investment funds through three reputable companies: Fidelity Investments, TIAA/CREF and Vanguard. Representatives from these companies visit the MGH periodically to provide individualized counseling for interested employees. The schedule below lists upcoming visits from Fidelity and TIAA/CREF representatives.

For more information about the MGH tax-deferred retirement program, send an e-mail request to the Benefits Office at ibenefits@partners.org or call 6-8133 and press "2" for the forms mailbox.

Financial Counseling Sessions

To schedule a half-hour appointment with a representative during one of the above times, call:

Fidelity: (800) 642-7131; TIAA-CREF (Kathleen Maida): (800) 842-2004.

Please see "New law defers state income tax on employers' retirement savings programs," in this issue.