Mayo Clinic Retirement Benefits: FAQs
As a Mayo Clinic employee, you have access to one of the most robust retirement benefit packages in healthcare. But with so many options and complex rules, it's easy to feel overwhelmed when trying to maximize your benefits.
To help you make informed decisions with your retirement savings, here are the answers to some common questions.
Does Mayo Clinic still offer a pension plan?
Yes! Mayo Clinic is one of the few U.S. companies that still provides a pension benefit at no cost to employees. While many employers have ended pension plans because of the expense involved in maintaining them, Mayo helps secure the financial future of its staff with a fully funded pension plan.
How do I become eligible for the Mayo Clinic pension?
You can join the plan if you're at least 21 years old and work in a regular, full-time or part-time job with Mayo Clinic. Temporary or on-call workers, as well as students (like residents or fellows), aren't eligible. Staff over 21 and whose full-time equivalent hours are 0.5 or greater are eligible to participate in the Mayo Clinic Pension Plan.
What does it mean to be "vested" in my pension?
Vesting ensures you keep your pension even if you leave before retirement. You become vested if you are:
Age 28 or older with at least 3 years of benefit service, or
Age 21 or older with 5 years of vesting service and some benefit service.
How is my pension benefit calculated?
Your pension calculation depends on when you were hired:
Before January 1, 2015: Your pension is calculated using two methods: a "Final Average Pay" formula for work before 2015 and an "Annual Accumulation" formula for work after 2015.
Between January 1, 2015 and January 1, 2023: The "Annual Accumulation" formula applies, where your pension grows with a small amount added each year based on your salary.
After January 1, 2023: The plan uses a "Stable Lump Sum" formula, which gives you a one-time payment when you retire.
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What's the difference between Mayo's 403(b) plan and a 401(k) plan?
The main difference is who can offer them.
A 403(b) plan is specifically for employees of tax-exempt organizations like nonprofits, public schools, and hospitals.
A 401(k) plan is for for-profit companies.
As a nonprofit organization, Mayo Clinic offers a 403(b) plan to its employees.
Does Mayo Clinic actually offer a 401(k) plan, or only a 403(b)?
The Mayo Clinic primarily offers a 403(b) plan rather than a traditional 401(k). While you may see references to "401(k)/403(b)" in some Mayo materials, the actual retirement plan available to most Mayo employees is the 403(b) plan administered by Fidelity.
How does the Mayo Clinic’s 403(b) plan work?
Like a standard 401(k), a 403(b) lets you contribute a portion of your paycheck to a savings fund. The funds can then grow through strategic investments until you withdraw them in retirement.
Can I make Roth contributions to Mayo's 403(b) plan?
Yes, Mayo Clinic's 403(b) plan does offer Roth contribution options. You can choose to make traditional pre-tax contributions, Roth after-tax contributions, or a combination of both.
When making pre-tax contributions, the funds are tax-deferred, meaning they are not included in your taxable income for this year. Then, during retirement, your withdrawals will be taxed as ordinary income.
With Roth contributions, you pay taxes on the money now. Your earnings grow tax-free, and qualified withdrawals will not be taxed in retirement. This can be especially valuable if you expect to be in a higher tax bracket in retirement or want tax-free income to supplement your pension and other retirement sources.
What kind of employer match does Mayo Clinic provide?
Mayo Clinic's employer match increases with your years of service:
Less than 20 years of service: 50% match up to 4% of your pay
20 to 29 years of service: 75% match up to 4% of your pay
30+ years of service: 100% match up to 4% of your pay
This graduated matching system rewards long-term employees with increasingly generous matching contributions.
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Does Mayo Clinic offer a 457(b) deferred compensation plan?
As a nonprofit organization, Mayo Clinic employees have access to a 457(b) deferred compensation plan. This is a significant advantage that many private sector professionals don't have.
The 457(b) plan allows you to contribute additional pre-tax dollars beyond your 403(b) limits. As of 2025, you can potentially contribute $47,000 ($62,000 for employees over 50) across both plans combined. This essentially lets you double your retirement savings compared to employees who only have access to a 401(k) or 403(b).
What health insurance options do I have when I retire from Mayo Clinic?
You have several options:
Mayo Medical Plan: Mayo retirees and spouses under age 65 can remain on the medical plan until they reach Medicare eligibility. The premium depends on when you started work at Mayo Clinic and which location you worked at.
COBRA: Provides bridge coverage for up to 18 months after employment ends. You'll pay the full cost of coverage provided by Mayo Clinic.
Medicare and OneExchange: Medicare-eligible retirees often enroll in Medicare Parts A and B and elect a supplemental plan through OneExchange, a company that Mayo Clinic works with.
What other retirement benefits does Mayo Clinic offer?
Mayo Clinic provides several additional benefits that can help with retirement planning:
Mayo Reimbursement Account (MRA): Mayo provides an annual $1,140 employer contribution that can be used toward dental and vision expenses
Medical Expense Reimbursement Plan (MERP): Annual employer allotment of $10,000 per staff member for reimbursement of medical and dental expenses for certain health plan levels
Health Savings Account (HSA) options for high-deductible health plans
Life insurance and disability benefits
What happens to my Mayo pension if I become disabled?
If you become disabled before retirement, your pension will continue to grow as if you had stayed on the job. When you reach 65, you'll receive benefits based on your pre-disability pay. This provides important protection for your retirement security, even if you can't continue working.
How should I prioritize my retirement contributions?
Generally, follow this order:
Contribute enough to your 403(b) to get the full employer match.
Maximize your Health Savings Account (HSA) if you have access to one.
Consider additional contributions to 403(b) and 457(b) plans.
Look into other tax-advantaged options, such as IRAs.
When should I start taking Social Security?
The earliest you can begin collecting benefits is at age 62, but you'll receive reduced benefits (about 75% of your full benefit). With Mayo's pension and other benefits, you may have more flexibility to delay Social Security until your full retirement age or even age 70 to maximize your benefits.
Getting Help with Your Mayo Clinic Benefits
Maximizing your Mayo Clinic retirement benefits takes careful planning and coordination. Your Mayo Clinic retirement benefits, pension formulas, tax rules, and payout options can quickly become overwhelming.
At TrueWealth Financial Partners, we understand the complexities of Mayo Clinic's benefit structure and can help you make informed decisions about your retirement planning. As a fee-only fiduciary firm, we provide objective guidance tailored to your specific situation.
We can help you:
Coordinate your 403(b) and 457(b) contribution strategies
Plan for healthcare costs in retirement
Create a comprehensive retirement income plan
Choose the right distribution strategy for your retirement income
Ready to make the most of your Mayo Clinic benefits?
Schedule a free consultation with one of our fiduciary financial advisors, and we can help you build a retirement plan that takes full advantage of Mayo Clinic's generous benefits package.
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