How To Maximize Your University Hospitals Retirement Package
As a University Hospitals employee, you have several options to choose from when it comes to your employer benefits. This is a good thing because it means you have the flexibility to choose a plan that works best for you, your family, and your future goals. But having choices can also be overwhelming, and you may not be sure which retirement plan is best for you.
Below, we describe the four retirement options University Hospitals Health Systems, Inc., provides, complete with a list of pros and cons for each. Although we recommend discussing your options with a qualified financial professional, we hope this simplified guide will help you better understand the options before you.
401(k) Retirement Savings Plan
This plan is a matched defined contribution plan and covers substantially all employees who work under the entities University Compcare, University Primary Care Practices, Inc., and University Hospitals Management Services Organization, Inc.
A defined contribution plan is a plan in which you, the employee, contribute a defined or fixed percentage of your paycheck to your employer-sponsored account every pay period. This plan is tax-deferred, so your contributions are made with before-tax dollars and your investments will grow tax-free until you withdraw money from the account for your retirement.
Pros to the 401(k) Retirement Savings Plan
- Eligible employees may enroll in the plan immediately upon their date of hire.
- High contribution limits
- Self-directed investments, so employees can choose how they want to invest
- Contributions reduce current annual taxable income.
- UHHS matches up to 50% of an eligible participant's contribution to the plan, up to 6% of compensation.
Cons to the 401(k) Retirement Savings Plan
- Self-directed investments, so employees may not know the best investments to choose
- Employees must complete one year of service to receive employer matches.
- Employees must complete three years of service to be fully vested.
403(b) Matched Retirement Savings Plan
This plan is also a matched defined contribution plan and covers substantially all employees who work under University Hospitals Health System, Inc. Like the 401(k) plan, employees enrolled in the 403(b) plan contribute a fixed percentage of their income and are eligible to receive employer matching contributions after one year of service.
The main difference between the 401(k) plan and the 403(b) plan has less to do with your options as an employee, and more to do with the for-profit entities underneath the not-for-profit parent organization, which is University Hospitals Health System, Inc. The entity under which you work determines whether you have the option to enroll in the 401(k) plan or the 403(b) plan.
Pros to the 403(b) Matched Retirement Savings Plan
- Eligible employees may enroll in the plan immediately upon their date of hire.
- High contribution limits
- Self-directed investments, so employees can choose how they want to invest
- Contributions reduce current annual taxable income.
- UHHS matches up to 50% of an eligible participant's contribution to the plan, up to 6% of compensation.
Cons to the 403(b) Matched Retirement Savings Plan
- Self-directed investments, so employees may not know the best investments to choose
- Employees must complete one year of service to receive employer matches.
- Employees must complete three years of service to be fully vested.
Retirement Plan
A noncontributory defined benefit pension plan, this plan covers essentially all employees of University Hospitals Health System who are at least 21 years of age and who have completed at least one year and 1,000 hours of service with University Hospitals Health System, Inc.
A defined benefit pension plan is a type of retirement plan in which the employer agrees to pay a specified monthly pension benefit (or lump sum) to an employee when they reach retirement age. The benefit amount is calculated based on the employee's earnings history, age, and years of service.
Pros
- Employer makes 100% of the contribution.
- Employees become eligible for a guaranteed monthly retirement benefit beginning at age 65 until employee passes away (or may receive early retirement benefits at age 55).
- Monthly payments increase to account for inflation.
Cons
- Employer contributions may not provide enough income during retirement to act as the sole source of retirement income.
- Employee cannot choose investments.
457(b) Plan
The 457(b) plan is a supplemental retirement savings plan available to a select group of highly compensated employees as determined by the plan administrator. A 457(b) plan is a type of non-qualified, tax-advantaged deferred compensation plan that is only available to certain employees within governmental and some non-governmental organizations (such as hospitals).
Pros
- No penalty for early withdrawals if withdrawal is used for qualifying hardship or employee has left the employer
- High special catch-up provisions
Cons
- Employee income must exceed a certain threshold to be eligible for this plan.
- No employer match with this plan
How We Help
At LakePointe Advisors, we serve University Hospitals physicians and employees to help develop a financial plan that optimizes your employer-sponsored benefits and allows you to pursue the future you dream of. We review which plan or combination of plans is right for you, how you can maximize the opportunities within that plan, and what strategies you can implement to increase your chances of achieving long-term success.
We are well-acquainted with the options you have available to you, so we'll waste no time getting to know you and assisting you in choosing the options that are right for you. Schedule a complimentary Strategy Session or contact us at sal@lakepointeadvisors.com or (440) 510-8004 to see how we can help.
About LakePointe Advisors, LLC
Our wealth and investment management process reflects our belief in the inevitability of higher taxes in the future. This belief is based on the numbers, not ideology.
When we sit down with a new client, we start by getting a clear picture of where they are today. We consider assets, liabilities, tax exposure, and how their investments are currently structured. Once we understand the full picture, we build a strategy to do three things:
Grow wealth and remove excess risk
Improve tax efficiency
Cut out excess fees that don’t need to be there
At the end of the day, our value is simple: we deliver a strategy built to grow and protect your wealth, improve your tax position, and eliminate waste.
Advisory services offered through Fourth Dimension Wealth, LLC a Registered Investment Advisor. Fourth Dimension Wealth, LLC and LakePointe Advisors, LLC are separate entities.
The information used to write this article was obtained from readily available, on-line plan information. This article is an overview designed to provide basic information, not specific advice, or recommendations. It is also not a complete description of every plan offered by University Hospitals. For a summary plan description of all plans offered, contact your benefits department. LakePointe Advisors is not endorsed by University Hospitals.
