Your U-M Retirement Savings Plan Investments

There are two ways to manage the investments in your U-M Retirement Savings Plan account. You can continue investing in the age-appropriate default fund that is automatically selected for you when you enroll, or you can create your own custom portfolio.

1. The Default Fund

When you enroll in the Basic Retirement Plan, 403(b) SRA or 457(b) plans, your contributions automatically default to an age-appropriate fund. Unless you make a change, your contributions will continue to be directed to this default fund for as long as you are employed at the University of Michigan.

  • If you select TIAA for your investment company, the default is a “Lifecycle Index Fund.”
  • If you select Fidelity Investments, it is a “Freedom Index Fund.”
  • If you do not have a U.S. street mailing address, the default investment fund for TIAA is the “CREF Money Market account.”

The fund selected is based on your current age and an expected retirement date at age 65. For example, a person hired today at age 45 would be placed into either the TIAA Lifecycle Index 2040 Fund or the Fidelity Freedom Index 2040 Fund. Whereas a person hired today at age 25 would be placed into a 2060 fund.

Please note that if you enrolled in the Basic Retirement Plan, SRA or 457(b) before 2008, the default fund was not available. You may choose a TIAA Lifecycle Index Fund or a Fidelity Freedom Index Fund for your investments if you no longer wish to maintain a custom portfolio.

How Do the Lifecycle/Freedom Index Funds Work?

Each of the TIAA Lifecycle Index Funds and Fidelity Freedom Index Funds are mutual funds that include a diversified portfolio of other mutual funds offered by that company. Each fund includes a mix of domestic and international stock mutual funds, bond mutual funds, and money market funds. The Lifecycle/Freedom Index Fund automatically selects the appropriate allocation of stock, bond, and money market funds that are appropriate for a target retirement date of approximately age 65.

The Lifecycle/Freedom Index Funds gradually adjust over time to become more conservative by decreasing the underlying equity holdings and increasing the fixed income holdings as the fund’s target retirement date nears. The gradual shift into fixed income from equities provides the potential for growth while reducing volatility as the retirement date approaches.

Read more about the TIAA Lifecycle Index Funds and the Fidelity Freedom Index Funds.

2. Create a Custom Portfolio

You can create your own custom-made portfolio by allocating your contributions among the various funds offered by TIAA and Fidelity. You may also select among the Vanguard funds offered through TIAA and Fidelity. Sophisticated investors also have the option to choose a self‑directed brokerage account, which provides access to additional mutual funds outside of the U‑M Retirement Savings Plan.

To view the investment options available through the U-M Retirement Savings Plans, visit Investment Companies and Funds, or login to your secure account with TIAA and/or Fidelity.

If you no longer wish to maintain a custom portfolio, you may choose to allocate your contributions to a TIAA Lifecycle Index Fund or a Fidelity Freedom Index Fund.

Review Your Investments with a Retirement Specialist

Having the right mix of investment funds that reflect your savings goals and current risk tolerance is critical to helping make sure you are on track to replace your income when you retire. Whether you keep the default fund or create your own portfolio, it is important to review your retirement savings and investment strategy periodically.

For free, personalized investment advice regarding your U-M retirement savings, schedule a meeting with a retirement specialist at TIAA or Fidelity. The retirement specialist can help you with variety of tasks, including:

  • Review if your current savings will provide adequate income in retirement
  • Review the investment options and provide fund-specific advice on which mix of investments supports your goals and risk tolerance
  • Answer questions you may have about the plan or how to get the most out of it

Contact TIAA or Fidelity to schedule your personalized advice meeting.

TIAA and Fidelity are the only vendors approved by the University of Michigan to provide advice on the U-M Retirement Savings Plans.

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