Understanding the Mayo Clinic 403(b) Employer Match
As a Mayo Clinic employee, one of your most valuable benefits is the company's generous 403(b) company match. Making the most of this benefit can dramatically impact your retirement security and long-term wealth.
How Mayo's Progressive 403(b) Match Works
Unlike most employers that offer fixed matching rates, Mayo Clinic rewards employee loyalty with a tiered matching structure that improves the longer you stay. The rates are:
Less than 20 years of service: Mayo matches 50% of your contributions of up to 4% of your salary.
20–29 years of service: Mayo matches 75% of your contributions of up to 4% of your salary.
30+ years of service: Mayo matches 100% of your contributions of up to 4% of your salary.
This means Mayo's contribution ranges from 2% to 4% of your salary annually, depending on your tenure, making it one of the most generous matching programs in the healthcare sphere.
Examples of the Mayo Clinic 403(b) Match
Let's take a look at how this progressive structure could work in practice.
Example 1: Early Career Employee (5 years of service)
Annual Salary: $65,000
Employee Contribution: 4% = $2,600
Mayo Match: 50% of 4% = 2% = $1,300
Total Annual Contribution: $3,900
Example 2: Mid-Career Employee (25 years of service)
Annual Salary: $85,000
Employee Contribution: 4% = $3,400
Mayo Match: 75% of 4% = 3% = $2,550
Total Annual Contribution: $5,950
Example 3: Veteran Employee (30+ years of service)
Annual Salary: $95,000
Employee Contribution: 4% = $3,800
Mayo Match: 100% of 4% = 4% = $3,800
Total Annual Contribution: $7,600
As you can see, the employer match can mean thousands of dollars in additional retirement income every year. For veteran employees, it can mean doubling your retirement contribution with no strings attached.
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Eligibility and Enrollment
All regular full-time and part-time Mayo employees who work at least 20 hours per week can participate in the 403(b) plan and earn matching contributions. However, certain groups may be excluded, such as residents, fellows, students, and some temporary or on-call workers.
For employees who are eligible, Mayo automatically enrolls you at a 4% contribution rate, the exact amount needed to maximize your employer match. This ensures you immediately begin receiving the full match benefit available for your service level without having to navigate complex enrollment decisions.
Of course, you can always adjust your contribution rate up or down based on your financial situation and goals.
Vesting: Securing Your Match
Mayo's matching contributions vest 100% after three years of vesting service, defined as working at least 1,000 hours in a calendar year. This vesting schedule is quite favorable compared to many employers who use longer or graduated vesting periods.
Strategies to Maximize Your Mayo 403(b) Match
1. Always Contribute at Least 4%
To receive Mayo's full employer match, you must contribute at least 4% of your salary. Contributing less means leaving free money on the table. For many employees, missing the full match could mean losing thousands of dollars per year.
2. Understand the Long-Term Value
Mayo's progressive matching structure creates powerful incentives for building a career with the organization. The progression from 50% to 100% matching represents substantial additional value over time, potentially hundreds of thousands of dollars over a full career.
3. Consider Contributing Beyond the Match
While 4% secures your full match, consider contributing more if your budget allows. The 403(b) plan permits contributions up to 50% of your salary (subject to IRS limits), and every additional dollar grows tax-deferred.
4. Leverage Automatic Increases
When you receive salary increases or bonuses, consider directing a portion to increase your 403(b) contributions. This "save your raise" strategy can accelerate retirement savings without impacting your current lifestyle.
5. Optimize Your Investment Selections
The match is valuable, but how you invest those funds matters for long-term growth. Review and optimize your investment elections regularly rather than setting them once and forgetting about them. Mayo's 403(b) plan offers various options through Fidelity, so take time to select investments aligned with your risk tolerance and retirement timeline.
6. Factor Vesting into Career Decisions
Before leaving Mayo, consider the three-year Vesting Service requirement. Departing before completing three years of Vesting Service (1,000+ hours annually) means forfeiting all employer matching contributions. If you're close to the three-year mark, the financial benefit of staying may outweigh other opportunities.
7. Work with a Fiduciary Financial Advisor
Retirement planning is nothing if not complex. A fiduciary financial advisor can help optimize your plans by providing objective guidance on contribution strategies, investment allocation, tax planning, and estate considerations. Fiduciary advisors are legally required to act in your best interest and can help ensure your Mayo 403(b) fits effectively within your broader financial goals and retirement timeline.
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Additional Mayo Retirement Benefits
Along with the 403(b), Mayo Clinic has several other retirement benefits you can use to build wealth as you near retirement.
457(b) Deferred Compensation Plan
As a nonprofit organization, Mayo offers the valuable 457(b) plan alongside the 403(b), allowing you to essentially double your retirement savings compared to typical employers. While the employer match only applies to the 403(b), the 457(b) provides additional tax-advantaged savings opportunities.
Comprehensive Pension Plan
Mayo remains one of the few U.S. companies providing a fully funded pension at no cost to employees. When combined with the 403(b) match, this creates an exceptionally strong retirement foundation.
Health Savings Account (HSA) Options
For employees enrolled in high-deductible health plans, HSAs offer triple tax advantages that complement your 403(b) strategy for retirement healthcare costs.
Ready to Optimize Your Mayo Benefits?
Mayo Clinic's progressive 403(b) employer match represents one of the most generous and unique retirement benefits available in healthcare. By maximizing this great benefit, you can boost your retirement income for years to come.
Ready to maximize your Mayo Clinic retirement strategy?
At TrueWealth Financial Partners, we specialize in helping you make a smooth transition to retirement. Our fee-only fiduciary approach ensures objective guidance on coordinating your 403(b) match with your pension, 457(b) opportunities, and complete retirement strategy.
We understand Mayo's unique progressive structure and can help you make strategic decisions that maximize your benefits throughout your career.
Schedule a free consultation, and we’ll be happy to help you make sure you're on the right track for your upcoming retirement.
Mayo Clinic 403(b) FAQs
Does Mayo match Roth 403(b) contributions?
Yes, Mayo's match applies to both traditional pre-tax and Roth contributions. However, the employer match is always made on a pre-tax basis, regardless of how you choose to contribute.
How does Mayo's match compare to other healthcare employers?
Mayo's progressive matching structure is unique in healthcare. While most systems offer fixed 50% matches on 3%–6% of salary, Mayo's progression from 50% to 100% matching rewards long-term employees with increasingly valuable benefits.
What happens to my Mayo 403(b) match if I leave before the three-year vesting period?
If you leave Mayo before completing three years of Vesting Service (1,000+ hours annually), you forfeit all employer matching contributions but keep your personal contributions and earnings.
Does Mayo match catch-up contributions for employees over 50?
No, Mayo's matching formula applies only to regular contributions, not catch-up contributions for employees age 50 and older.
Can I contribute more than 4% and still get the employer match?
You can contribute as much of your salary as you choose (subject to IRS limits), though Mayo's match only applies to your first 4% of contributions.
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