New Update: Rising Oil Costs are Affecting Retirement Plans. Will you be impacted?
6 Retirement Myths Every Caleres Employee Should Not Fall For!
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With crude oil volatility near 80% and prices spanning $50 to $120 per barrel over the past six months, energy cost uncertainty influences economic conditions across industries. Sustained crude volatility creates economic ripple effects that influence everything from Federal Reserve policy to corporate earnings guidance to consumer confidence. Caleres employees may find that their portfolio returns, benefit cost-sharing, and overall financial outlook are all shaped by an energy market they do not directly participate in. Caleres employees building long-term savings should recognize that oil-driven economic conditions can affect both the growth of their portfolios and the purchasing power of their eventual retirement income. Consulting with a financial advisor can help you understand how energy conditions affect your specific situation and build a plan that adapts accordingly.
During our 30+ years helping retirees, the majority have been very excited to start the planning process. However, some have been surprised to find out our recommendations differ from what they have heard elsewhere.
This is because there’s a lot of misinformation swirling around. As a fiduciary, we are legally obligated to serve your best interests at all times. So, we can tell you achieving the retirement you desire is not going to happen if you’re sidetracked by myths and false information.
That's why we aim to debunk the top six retirement myths that Caleres employees may have heard. Our goal is to help you start building the retirement of your dreams today.
Myth #1: If I receive a pension, I do not have to make any decisions regarding my pension.
If Caleres offers you a defined-benefit plan, your pension is primarily the responsibility of the company. However, that doesn’t mean you just wait for a check in the mail once you retire. You have major decisions to make.
If offered a pension, employees can potentially elect to receive a monthly payout like a traditional pension or they could convert their pension into a one-time lump-sum benefit, which can be subsequently rolled over into an Individual Retirement Account (IRA) and then controlled by the retiree.
So, monthly or lump-sum pension?
Each payout has its own set of pros and cons. Deciding which option is most appropriate for you involves many factors. Deciding which option is most appropriate for you involves many factors. It is best done with the help of a professional, who can incorporate all aspects of your financial life – Social Security, 401(k), real estate, and inheritance into your decision.
Further, married Caleres employees may have survivor benefit options to consider. At retirement, it is possible that you have multiple survivor options to choose from for the monthly pension, but these are only available for a qualified spouse.
Myth #2: If I receive a pension from Caleres , Social Security becomes less important.
Social Security will likely be one of your primary sources of retirement income. And just like your pension, you should carefully consider how best to use it based on your personal needs.
The size of your Social Security benefit is greatly determined by your age when you claim. You can receive your full Social Security retirement benefit upon reaching your Full Retirement Age, which is age 66 or 67, depending on your date of birth. But you can claim a permanently reduced benefit as early as age 62. Delaying Social Security until age 70 entitles you to a higher benefit of up to 8% per year. A benefit at age 70 will be 76-77% higher than the payout if you start at age 62.
Ultimately, factors such as your other income sources, marital status and health should guide your decision, not just when you can get the biggest Social Security paycheck.
Myth #3: When I retire from Caleres doesn’t matter
No, no, no. When you retire has a major effect on the quality of your retirement.
For one, years of service is one of the primary factors in your pension calculation. Generally, the longer you work at Caleres, the higher your pension. Your pension is also impacted by interest rates, which fluctuate. When rates are lowered, lump-sum pension payouts are increased, and vice versa.
Plus, Caleres retirement benefits are not set in stone. They are subject to change. For example, the significant changes made to Caleres’s pension calculation, health care subsidies and retiree health insurance.
You may find that it is more financially advantageous to retire sooner or later than your desired retirement date.
Myth #4: Caleres stock is a good investment
Something Caleres employees should be aware of is that we commonly see employees invest an excessive amount of their 401(k) in their company’s stock. While it can be rewarding to own a piece of a respected company, it may be risky from a retirement planning perspective.
Firstly, most of your financial life becomes dependent on the performance of one company. That includes your current income and retirement income from the Caleres pension and 401(k) plan (if Caleres offers these to you). Such a high concentration of your financial well-being in a single company is risky. Secondly, a single stock can be riskier and more volatile than a mutual fund or the broader stock market. Therefore, the greater amount of Caleres stock you have in your 401(k), the more you can expect your investment return to fluctuate.
It’s more appropriate to diversify the investment choices in your Caleres 401(k) account (If Caleres offers you a 401K). That means selling your company stock and investing in mutual funds. The right mix of funds depends on your specific needs, goals and level of risk you’re comfortable with.
Myth #5: It’s better to leave my 401(k) with my company.
Upon leaving Caleres, you may leave some or all of your savings in your Caleres 401(k) account (If this is offered to you). However, there are a variety of benefits to rolling over your 401(k) to an Individual Retirement Account (IRA). These include greater investment choices, greater withdrawal flexibility, more withholding options, and professional management by an advisor of your choosing.
When done properly, no tax applies to the rollover. One area of your 401(k) that provides no flexibility is tax withholdings.Every withdrawal is subject to a mandatory 20% federal tax plus applicable state taxes.
Myth #6: Medicare will cover my medical expenses
One of the biggest expenses for most people in retirement is health care. Taking the time to review your options can help you plan accordingly and avoid large out-of-pocket costs that could derail your retirement.
Once you turn 65 you are Medicare-eligible You and your Medicare-eligible dependents are required to enroll in Medicare Part A (hospital benefits) and Part B (doctor benefits). These two parts cover about 80% of health care benefits for individuals, so it’s important to consider your supplemental coverage options.
That same shift from growing assets to drawing them down applies directly to the pension decisions in front of you at Caleres. Caleres has frozen its defined benefit pension to new accruals, meaning your benefit is based on service and compensation accumulated up to the freeze date - but the value already locked in remains a meaningful asset worth analyzing. If a lump sum option is available, IRS segment rates in effect during the plan's lookback period directly affect the present value calculation; rising rates reduce the lump sum amount, so the rate environment at your retirement date matters. Understanding the annuity equivalent of your frozen benefit and comparing it to a potential lump sum is an important step in sequencing your retirement income from multiple sources.
On the healthcare side, Caleres provides continued medical coverage to eligible retirees, which can bridge the gap between retirement and Medicare eligibility at age 65 or serve as a supplement to Medicare thereafter. Confirming the service and age requirements for retiree coverage, and understanding your premium contribution, is an important step in building an accurate healthcare cost projection. Coordinating Caleres's retiree coverage with Medicare Part B and Part D enrollment timing can also reduce duplication and avoid late-enrollment penalties. Connecting your specific Caleres benefits situation to a comprehensive retirement income plan - and understanding how each component interacts - gives you the most complete picture of what retirement will look like.
What type of retirement savings plan does Caleres offer to its employees?
Caleres offers a 401(k) retirement savings plan to its employees.
How can employees at Caleres enroll in the 401(k) plan?
Employees can enroll in the Caleres 401(k) plan by completing the enrollment process through the company's designated benefits portal or by contacting the HR department for assistance.
Does Caleres provide any matching contributions to the 401(k) plan?
Yes, Caleres offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
What is the eligibility requirement for employees to participate in Caleres' 401(k) plan?
Employees must meet specific eligibility criteria, such as age and length of service, to participate in Caleres' 401(k) plan.
Can employees at Caleres change their contribution amounts to the 401(k) plan?
Yes, employees at Caleres can change their contribution amounts to the 401(k) plan at any time, subject to the plan's rules.
What investment options are available in the Caleres 401(k) plan?
The Caleres 401(k) plan offers a variety of investment options, including mutual funds and target-date funds, allowing employees to choose based on their risk tolerance and retirement goals.
Is there a vesting schedule for employer contributions in Caleres' 401(k) plan?
Yes, Caleres has a vesting schedule for employer contributions, which determines when employees have full ownership of those contributions.
How can employees at Caleres access their 401(k) account information?
Employees can access their 401(k) account information through the online portal provided by the plan administrator or by contacting Caleres' HR department.
What happens to an employee's 401(k) account if they leave Caleres?
If an employee leaves Caleres, they have several options for their 401(k) account, including rolling it over to another retirement account, cashing it out, or leaving it in the Caleres plan if allowed.
Are loans available through the Caleres 401(k) plan?
Yes, Caleres allows employees to take loans against their 401(k) balance, subject to the plan's terms and conditions.
For more information you can reach the plan administrator for Caleres at 8300 Maryland Ave. St. Louis, MO 63105; or by calling them at +1 314-854-4000.
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