Optimizing Your Largest Workplace Benefit

Your University of Michigan retirement benefits may be one of the most valuable parts of your compensation—the University's match is genuinely generous—but they're also one of the most complicated to navigate. Between the Basic Retirement Plan, the 457(b) Deferred Compensation Plan, and the choice between TIAA and Fidelity, it is easy to feel unsure whether you are making the most of what the University offers. This guide walks through how the pieces fit together and the decisions worth getting right.

The building blocks of your University retirement benefits

University of Michigan employees generally have access to a few distinct accounts, and understanding what each one does is the first step:

• 1.The Basic Retirement Plan. This is the core of the program. Your own contributions typically go into a 403(b), while the university's contributions go into a 401(a). The employer contribution is a meaningful benefit, and reviewing that it is being captured in full is an important early step. Both University 401(a) and Employee 403(b) contributions into the Basic Retirement Plan are Pre-Tax only as of 2026.
• 2.The 457(b) Deferred Compensation Plan. A separate, voluntary account that lets you set aside additional Pre-Tax or Roth dollars for retirement, subject to IRS limits. For higher earners looking to save beyond the basic plan, the 457(b) can be a valuable tool.
• 3.Your investment custodians — TIAA and Fidelity. The University makes your plan investments available through TIAA and Fidelity. The account type (403(b), 401(a), 457(b)) defines the tax treatment; the custodian and the funds you choose define how your money is actually invested.

TIAA or Fidelity: how to think about the choice

One of the most common questions we hear from University employees is simply, "Should I be with TIAA or Fidelity?" There is no universal right answer. Each custodian offers a different menu of investment options and features, and many employees end up holding assets with both over the course of a career.

While selecting the best Custodian is important, it is more essential to embark on your Investment Journey by focusing on you: your age, your timeline to retirement, your comfort with risk, your other savings and income, and what you want retirement to look like. From there, the appropriate mix of accounts, custodians, and investments becomes much clearer. The goal is to build a portfolio around your plan — not to pick a product in isolation.

Decisions worth getting right

A few themes come up again and again for University of Michigan employees:

• —Coordinating your accounts. Your 401(a), 403(b), and 457(b) should work together as one strategy rather than three separate pots of money.
• —Reviewing your investment allocation. Default options are a starting point, not necessarily the right long-term allocation for your situation.
• —Planning the transition to retirement. Turning decades of saving into a reliable, tax-aware income stream is its own discipline — and one worth planning well before your last day.
• —Handling old accounts. If you have retirement accounts from a prior employer, deciding whether and how to consolidate them is worth a careful look.

How a fiduciary advisor can help

As independent, fiduciary advisors, we have had the privilege of partnering with University of Michigan employees for over a decade. We can help you understand and actively manage the investments within your 401(a), 403(b), and 457(b) — whether they are held with TIAA or Fidelity — and coordinate them with your broader financial plan, both while you are still working and into retirement. You can learn more about our approach on our University Employee Retirement Planning page.

The measurable value of guidance

Good advice is about more than picking investments. Vanguard’s ongoing Advisor’s Alpha® research estimates that the practices a strong advisor brings — disciplined asset allocation, behavioral coaching that helps you stay invested through volatile markets, cost-effective implementation, rebalancing, and tax-smart withdrawal strategies — can add roughly 3% in net value for clients over time. Vanguard is careful to note that this is not an annual guarantee: the benefit is irregular, tends to show up most during turbulent markets, and varies significantly from one person to the next. For a University of Michigan employee coordinating a 401(a), 403(b), and 457(b) across two custodians, that kind of disciplined, whole-picture guidance is often where an advisor adds the most.

Read Vanguard’s Advisor’s Alpha research →

This article is for educational purposes only and does not constitute individualized investment, tax, or legal advice. Plan features and rules are subject to change; confirm current details with your plan administrator. Legacy Wealth Partners is neither endorsed by nor affiliated with the University of Michigan. Neither Legacy Wealth Partners nor Commonwealth Financial Network® is sponsored by, affiliated with, or in any way related to TIAA, Fidelity, or any of their affiliates or subsidiaries. Vanguard’s Advisor’s Alpha® is a registered trademark of The Vanguard Group, Inc.; Legacy Wealth Partners is not affiliated with Vanguard, and the value estimate cited is Vanguard’s, based on hypothetical assumptions that may not reflect actual results.