Auxiliary bearings (AB) support the rotor and protect the magnetic bearing (AMB) system when the AMB is disabled due to power loss or excessive loads. The paper demonstrates that installing a damping device along with the AB can yield extended AB fatigue life, protect the AMB, and reduce vibration, contact force and AB heating. A squeeze film damper (SFD) is an energy dissipation device that has been widely used in the turbo-machinery industry, and as demonstrated in the paper can also work effectively in combination with an AB. Usually, the SFD implements a supply groove to ensure adequate lubricant flow into the film lands. The supply groove can provide significant added mass coefficients and significantly influence the overall impedance of the SFD. Past literature has analyzed the transient response of the rotor dropping onto AB's with squeeze film dampers, none though have considered the influence of the SFD's center groove and its added mass effect on rotor's drop behavior. This paper develops a high fidelity finite element grooved SFD model considering the fluid inertia, and an effective groove clearance is used following the practice appearing in the literature. SFD force coefficients are benchmarked with results of a linear fluid inertia, bulk-flow model developed in the literature, before including them in the rotor – AB system model. The SFD model is integrated into a high fidelity nonlinear auxiliary bearing (angular contact ball bearing) model, which considers the movements, contact force, stress, and temperature of bearing balls, the inner race and outer race. The instantaneous reaction forces from the SFD are calculated with a finite element based solution of Reynold equation at each time step due to the intermittent and large sudden loads. The flexibility of the rotor is included utilizing a Timoshenko beam, finite element model. The fatigue life of the auxiliary bearing when integrated into the SFD is also calculated based on the rain flow counting method. The influence of the added mass of the SFD on the rotor's drop behavior is demonstrated showing that the added mass increases the contact force and peak temperature and reduces the fatigue life of the AB. Therefore, the added mass effect of the SFD should be considered to avoid over predicting the AB fatigue life. The influence of the SFD clearance on the rotor's drop behavior is also studied showing that an optimal clearance exists for increasing the AB fatigue life. Too small of a clearance will yield excessive damping making the effective stiffness too large, and causing high contact forces. Too large of a clearance lowers damping which may lead to a destructive backward whirl. This paper provides key guidelines for auxiliary bearing damper system design.