Today started like any ordinary day around here. Had my breakfast, watched a little CNN, checked out my emails, and played a bit of free online slots. It was a typical Monday morning here in exciting retirement land. Yeah, real exciting, huh? Well, nothing like a financial windfall to add a little pizzazz to your day!
I am a creature of habit these days and although there are a few surprises here and there that do happen, what happened today was totally unexpected! I am still pinching myself and I am overwhelmed. Today’s mail brought an amazing letter from one of my former employers, R.H. Macy.
R.H. Macy Gave Me My Start
I worked for Macy’s under several different parent corporate names over a 19 year run, in the 70’s, 80’s and 90’s when it became Federated Stores which it remains today. Seems like eons ago, but I have to admit my days as an executive trainee working there after college laid the foundation for all of my knowledge over the years as a retailer.
I think I always felt that Macy’s was like a relative of mine who gave me my first break in the business world and that I owed them something in the way of gratitude and loyalty. I think that feeling is very common to many people who get their first good job and get the opportunity to shine. That was me, at age 23 at Macy’s.
New Jobs Mean Tons of Paperwork
I’m sure you have had the experience of beginning a new job and going through the routine of filling out all of the required documents from payroll information to benefits for things like health insurance and retirement plans, among others. I did that too and as a young, inexperienced kid I didn’t really understand some of it, but I signed all the papers and never really looked back.
One of Those Papers Was About the Macy Pension Plan
Frankly, I did get a few memos here and there over the years about things like vesting, and distribution changes and options, but I really didn’t think a lot about any of it since I was so very far away from retirement back then and I wasn’t putting any of my own money into the pension plan. It was fully funded by the company. I was much more aware of the 401(k) plan and the ESPP (Employee Stock Purchase Plan) that I was investing in from each payroll check and honestly just forgot about the pension.
All Good Things Come to an End
In the early 90’s, I left Macy’s and started a new career in specialty retailing. I was very excited to get an opportunity to run an 11-store retail chain as the COO. Again, lots of paperwork and I signed them all and took my Macy’s 401(k) with me along with a cash-out on my Macy’s stock. Looking back, that probably wasn’t a great decision but I did it and I invested the money in some of the new tech stocks like AOL. I gave absolutely no thought to the pension plan since I was still 25+ years from retirement.
As TV’s Gomer Pyle once said, “Surprise, Surprise, Surprise”
Today, I strolled down to the mailbox as I usually do each afternoon around 4 pm and to my surprise, I found a huge envelope from Macy’s with the header: “Important Retirement Benefit Information”.
My first thought was, “How the heck does Macy’s know where I live?” I hadn’t worked there in 25 years so what could this be all about?
Inside the house, I carefully opened up the 30-something pages stapled together and read and then reread the following: “This letter is to inform you of your benefits under the R.H. Macy Inc. Pension Plan”.
It seems that my pension, something that I had totally forgotten about, was now to begin paying me since I had reached full retirement age (FRA). I had to read it four times before I believed it!
It had tons of gobbledygook in the letter, but the bottom line is this: once I make a selection from the payable options (it’s payable as an annuity), the payments will begin and can last for decades or longer. The amount of the payments is subject to the terms I select but will be somewhere around $500 a month and that literally is like money falling from the sky for my wife and me.
Interestingly enough, I have actually found an error in my Macy’s payout plan which should have begun back in 2015 when I reached age 66, my full retirement age (FRA). Check your FRA at the Social Security website. Macy’s actually now owes me back benefits for 27 months (ka-CHING!!!) that should come to me even before my first monthly check does.
The Moral to the Story
I thought I was so smart and completely on top of all of my money, where it comes from and where it goes, etc. I completely forgot about my pension and in fact it should have been right in the forefront of my retirement planning.
The lesson here for all is to make sure you know what benefits you have now and what you may have left behind somewhere you have previously worked. Although I am thrilled to get this financial windfall, I will now have to rethink all of the planned use of my retirement funds and my potential tax liabilities that will result. I know that sounds like I am being a bit ungrateful, I’m not. I am just saying that I really should have known about all of it and planned accordingly. But you’re never too late to learn.
The other moral to this story is to use financial windfalls wisely. I’m planning to pay off the debt we have (dental expenses from earlier this year, the final few car payments, and extra payments on our mortgage), use some of the money to pad our emergency fund, increase our charitable giving, and generally not go out and spend it all. Any time you get a financial windfall, whether it’s a raise or some other monetary gain, make sure it goes to your goals and doesn’t get lost in a spending frenzy.
Are you on top of your retirement planning and have you kept good records on any benefits you may be getting when you reach FRA? What do you think about my good fortune? How would you spend it?