Options when you leave IU

What you can do with your remaining retirement funds if you leave IU

When your employment with IU ends, contributions to your retirement plan accounts also end. However, you have several options for the funds that remain in your accounts:

  • You can leave your funds in your IU account and continue managing your investments, beneficiaries, and contact information as usual. You can also continue to meet with Fidelity at no cost.
  • You can withdraw all or a portion of your vested plan balance. Withdrawals may be subject to income taxes and, in some cases, early withdrawal penalties.
  • You can move all or part of your vested balance into another eligible retirement plan, such as an IRA.

Most retirement plan transactions following your separation will need to be handled directly with the investment provider. For full details, refer to the Benefits After Separation Guide.

Required minimum distributions

Following your separation/retirement from the university, the IRS requires that you begin taking distributions from certain retirement accounts— called “required minimum distributions” or RMDs—starting at age 72 or 73:

If you turned 72 on or before December 31, 2022, your RMDs begin at age 72.

If you turn 72 on or after January 1, 2023, your RMDs begin at age 73.

You must take your first RMD from each applicable retirement account by April 1 of the year after you reach the required age, and then by December 31 each year after that. For example:

You retire on December 31, 2025.

You’ll need to take an RMD for 2025 by April 1, 2026, and another for 2026 by December 31, 2026.

Your retirement year is the last calendar year you receive wages from IU (reported on a W-2). If you're still working, you can defer RMDs until after you separate/retire from IU without penalties. For questions about RMDs, contact Fidelity or your retirement investment provider.

View the IRS’ top questions about RMDs