The Macy's 401(k): Everything You Need to Know
If you work at Macy's, your 401(k) is likely one of your biggest assets, and its rules are buried in a 62-page summary plan description. This guide covers what matters most: eligibility, the match, your investments, and how to get money out.
The plan rules below are based on the Macy's, Inc. 401(k) Retirement Investment Plan Summary Plan Description, effective July 1, 2025. If you're covered by a collective bargaining agreement, live in Puerto Rico, or have money from a prior company plan that merged into this one, some rules may be different for you.
Who's eligible and when you can join
The plan has two levels of participation:
Non-Match Eligible: Join immediately at hire, at any age and any employment type. No company match.
Company-Match Eligible: After 1 year of service with at least 1,000 hours, and age 21. Includes the match.
You can save from day one, but the match starts the 1st of the month after you meet both requirements.
Automatic enrollment: When you become match-eligible, Macy's automatically enrolls you at 3% pre-tax unless you choose otherwise. After your first full year, that rate increases by 1% each January 1 until it hits 6%. Your money goes into a Target Retirement Date Fund by default until you pick your own investments.
Worth knowing: Changing your rate stops the automatic increases unless you opt back in.
How much you can contribute
The Macy's plan offers three ways to save, and you can use any combination:
Pre-tax: Lowers your taxable income today. You pay tax when you withdraw.
Roth: No tax break today, but qualified withdrawals are tax-free.
Regular after-tax: Not matched, but they unlock a strategy covered below.
All three combined can't exceed 50% of your eligible pay in any pay period. On top of that, the IRS sets these limits for 2026:
Pre-tax and Roth contributions: $24,500
Catch-up, age 50 to 59 and 64+: an extra $8,000
Catch-up, age 60 to 63: an extra $11,250
You and Macy's combined, excluding catch-up: $72,000
New for 2026: If you earned more than $150,000 in FICA wages from Macy's in 2025, any catch-up contributions must go in as Roth, not pre-tax. The plan still lets you make your regular contributions pre-tax. (source)
The after-tax opportunity: Since after-tax money can be withdrawn any time, high savers may be able to roll it into a Roth IRA (a "mega backdoor Roth"). Highly compensated employees may see some contributions refunded after plan testing, so plan ahead.
The Macy's match and vesting
Contribute 6% of your pay and Macy's adds 3.5%. Macy's matches 100% of the first 1% you contribute and 50% of the next 5%. Both pre-tax and Roth contributions count toward the match; after-tax contributions don't.
For example, contributing 3% gets you a 2% match, and contributing more than 6% still gets you 3.5%.
At the 3% auto-enroll rate, you're missing out on 1.5% of your pay in match, and the automatic increases take at least three years to close that gap.
When the match shows up: Macy's generally deposits the match after year-end, but if you leave mid-year you're still generally eligible for it.
Vesting: Your own contributions are always 100% yours. The match vests fully after 2 years of service with at least 1,000 hours per year. Leave before that and you generally forfeit it. You're also fully vested if you leave at normal retirement age (the later of 65 or 5 years in the plan), due to a store or facility closing, disability, or death.
Your investment options
The menu is short and mostly index funds. If you don't choose, your money goes into the Target Retirement Date Fund closest to the year you turn 65.
Stable Value Fund: High-quality bonds with "wrap" contracts from insurers and other financial institutions for stability
S&P 500 Index Fund: Large U.S. companies
Extended Market Index Fund: Mid and small U.S. companies
International Index Fund: Stocks outside the U.S., including emerging markets
Target Retirement Date Funds: Vanguard all-in-one funds that get more conservative over time
Self-Direct Brokerage: A wide range of mutual funds through Merrill
Macy's, Inc. Stock Fund: Macy's company stock
A few things to know:
The S&P 500, Extended Market, and International funds together cover nearly the entire global stock market. Together, they can form a diversified stock portfolio.
There's no core bond index fund. Stable Value is the only fixed income option on the core menu. For more bond exposure, you'd use a Target Date Fund or the brokerage window.
The Self-Direct Brokerage window costs $80 a year and holds mutual funds only. It's worth it if you need something the core menu lacks, not otherwise.
Macy's stock is capped at 25% of new contributions, and you can't transfer money in if it would push Macy's stock above 25% of your balance. Your paycheck already depends on Macy's; your retirement savings probably shouldn't depend on it too.
Borrowing from your 401(k)
You can borrow up to 50% of your vested balance, capped at $50,000, with one loan outstanding at a time.
The minimum loan is $500, repayment runs 1 to 5 years through payroll deduction, and a $50 fee comes out of the loan proceeds.
The big risk: If you leave Macy's with a loan outstanding, the remaining balance generally comes due within a short grace period. If you can't repay it, it's treated as a withdrawal: taxable income, plus a possible 10% penalty, unless you roll that amount into an IRA by your tax filing deadline, including extensions. Factor that in before you borrow.
Taking money out while you're still working
What you can access while still working depends on your age and where the money came from.
After-tax contributions: Any time, at any age. Can be rolled to an IRA.
Money you rolled in from another plan: Any time, at any age. Can be rolled to an IRA.
Your pre-tax and Roth contributions: At 59½ or older (can be rolled to an IRA), or for a qualifying hardship (can't be rolled over).
Macy's match: Generally not until you leave.
The age 59½ in-service rollover: At 59½, you can roll your own pre-tax and Roth contributions and their earnings into IRAs while still working (Roth money goes to a Roth IRA), often for more investment choices. The match stays in the plan until you leave.
Hardship withdrawals (under 59½): Only for specific needs like a home purchase, medical bills, tuition, or avoiding eviction, and only after tapping other available money and loans. They're generally taxable, often hit with a 10% penalty, and can't be rolled over.
Smaller penalty-free options:
Emergency withdrawal: One withdrawal of up to $1,000 for personal or family emergencies. Taxed but no 10% penalty. You can't take another for 3 years unless you pay it back.
Birth or adoption: Up to $5,000 within one year of a birth or adoption. Taxed but no penalty.
Disaster relief: Up to $22,000 if your home is in a federally declared disaster area, taken within 180 days of the disaster. Taxed but no penalty.
All three can be paid back into the plan later.
Check what's available on Benefits OnLine or through the Colleague Support Center.
When you leave Macy's
When you leave, you generally have four options:
Leave it in the plan. You keep access to the plan's index funds. If your balance is $1,000 or less, the plan will cash you out automatically.
Roll it to an IRA. More choices, one place to manage it. A direct rollover avoids taxes and 20% withholding.
Roll it to a new employer's plan, if that plan accepts rollovers.
Take a payout. The plan offers a lump sum (cash, or cash plus Macy's shares) or an annuity purchased from an insurance company. The plan document doesn't describe partial withdrawals or installment payments, so confirm with the plan before counting on them.
Leaving at 55 or older: If you leave Macy's in or after the year you turn 55, payouts from this plan avoid the 10% early withdrawal penalty, even before 59½. Roll the money to an IRA and you lose that exception until 59½, so the order you do things in matters.
If you own Macy's stock in the plan, pause before rolling it over. Taking the shares out as stock can qualify for net unrealized appreciation (NUA), where you pay income tax only on the shares' original cost and long-term capital gains rates on the built-up growth when you sell. It requires distributing your entire account within one calendar year (the non-stock portion can still go to an IRA), and rolling the shares to an IRA ends the option for good.
Married? You can take a lump sum or a joint-and-survivor annuity without your spouse's signature. Other annuity types require your spouse's written, notarized consent.
Common mistakes to avoid
Staying at the 3% auto-enroll rate. You need to contribute 6% to get the full 3.5% match.
Leaving right before you're vested. The match vests after 2 years.
Holding too much Macy's stock. Your job and your savings shouldn't ride on the same company.
Borrowing and then changing jobs. An unpaid loan can become a taxable withdrawal when you leave.
Rolling over Macy's shares without checking NUA. Once they're in an IRA, the tax break is gone.
Rolling to an IRA too early if you leave between 55 and 59½. You give up penalty-free access you'd have had in the plan.
Ignoring the after-tax option. High savers who've maxed out pre-tax and Roth contributions may be able to move extra money into a Roth IRA.
Get help with your Macy's 401(k)
Whether you're deciding on a 59½ rollover, weighing NUA on your Macy's shares, or planning your exit, the right move depends on your full financial picture.
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About the author
Michael Walstedt, CFA, CFP®, is the founder of Reliant Wealth Advisory, a fee-only fiduciary firm in Hoboken, New Jersey. He helps business owners, executives, and professionals in the New York/New Jersey area, as well as nationwide, with financial planning and investment management.
Reliant Wealth Advisory is not affiliated with Macy's, Inc. This article is for educational purposes only and is not tax, legal, or investment advice. It summarizes the Macy's, Inc. 401(k) Retirement Investment Plan Summary Plan Description effective July 1, 2025, and 2026 IRS limits. Plan details vary and may change, so confirm your specific benefits through Benefits OnLine, the Colleague Support Center, and your official plan documents. Consult a qualified tax professional and attorney before acting.
