EXXONMOBIL RETIREMENT GUIDE
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ExxonMobil
Retirement Guide
Updated
For Current
Interest Rates
See pg. 19-20
2021
Securities offered through FSC Securities Corporation, member FINRA/ SIPC. Investment
advisory services offered through The Retirement Group, LLC. a registered investment advisor
not affiliated with FSC Securities Corporation. Office of Supervisory Jurisdiction: 5414 Oberlin
Dr. #220, San Diego, CA. (800) 900-5867
American Rescue Plan Act
The American Rescue Plan Act (ARPA) of 2021 was signed into law in early March. The
emergency relief package will cost $1.9 trillion and will provide payments to
individuals and funding to federal programs, local governments, vaccination efforts,
etc. But how will this bill affect you?
Stimulus
You may receive the $1,400 stimulus check ($2,800 if married filing jointly),
although those with an adjusted gross income of $80,000 ($160,000 if married
filing jointly) will not receive the payment.
Changes to unemployment benefits:
Those receiving unemployment benefits will receive an additional $300 per week
through September 6th, 2021.
Those who’ve exhausted their state’s unemployment benefits will receive a 29-
week extension of federal benefits.
Unemployment benefits will also apply to independent contractors and part-time
workers until September 26th, 2021.
COBRA
The federal government will pay the entire COBRA premium from April 2021
through September 30th, 2021. This applies to people who have lost their job and
qualify for health insurance under the COBRA continuation coverage program.
If you purchased health insurance through a government exchange you may
qualify for a lower price through december 31st, 2022.
Child/Dependant Tax Credits
Child tax credits will increase from $2,000 to $3,000 (again depending on your
modified adjusted gross income) and the age of qualifying children will be
expanded to include 17-year-olds in 2021.
The maximum for child and dependent care tax credits will increase to $4,000 for
one individual and $8,000 for two or more individuals. This credit is fully
refundable for 2021 as well.
Earned income tax credits
Individuals without qualifying children will receive an increased credit.
The maximum age limit to claim this credit has been eliminated for 2021.
Tax payers will also be able to use their 2019 earned income to determine the
credit amount if it is higher than their 2021 earned income.
The earned income tax credit will now be available to separated spouses who do
not file joint tax returns.
02 800-200-9838
Contents
Introduction.............................................................. 4
Your Guide.................................................................. 5
Planning Your Retirement ........................ 6-9
Your Pension Plan ........................................10-20
Your 401(k) Plan ............................................ 21-26
Your Benefits................................................... 27-28
Social Security & Medicare .................... 29-31
Divorce ................................................................ 32-33
Survivor Checklist............................................... 34
Life After Your Career....................................... 35
Sources....................................................................... 36
Offices & Disclosure........................................... 37
Schedule
your
Complem
entary
Call Toda
y!
800-200-9838 03
Introduction
Your focus: Being great at
your craft.
Our focus: Helping you plan for a
happy retirement.
You've worked for many years in the energy industry. Let us help you
get your financial house in order for the retirement you’ve been
working for.
04 800-200-9838
Your Guide The Retirement Group is a nation-wide group of financial advisors who work together as a team. We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees. Each representative of the group has been hand selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their in-depth understanding of pensions, experience in financial planning, and portfolio construction knowledge. TRG takes a teamwork approach in providing the best possible solutions for our clients’ concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent. Therefore, we encourage you to have your plan updated a few months before your potential retirement date as well as an annual review. It should be emphasized that neither The Retirement Group, LLC nor any of its employees can engage in the practice of law or accounting and that nothing in this document should be taken as an effort to do so. We look forward to working with tax and/or legal professionals you may select to discuss the relevant ramifications of our recommendations. Throughout your retirement years we will continue to update you on issues affecting your retirement through our complimentary and proprietary newsletters, workshops and regular updates. You may always reach us at (800) 900-5867. 800-200-9838 05
Planning Your Retirement
Retirement planning is a verb. And consistent
action must be taken whether you’re 20 or 60.
The truth is that most Americans don’t
know how much to save or the amount
of income they’ll need.
A separate study by
No matter where you stand in the
Russell Investments, a planning process, or your current age,
large money we hope this guide gives you a good
management firm, came overview of the steps to take and
resources that help you simplify your
to a similar conclusion. transition into retirement and get the
Russell estimates a good most from your benefits.
financial advisor can When you’re building a successful
increase investor returns career and a healthy income, you
by 3.75 percent. increasingly feel as though managing
your finances is more demanding than
ever.
You know you need to be saving and
investing, especially since time is on
Source: Is it Worth the Money to your side the sooner you start, but you
Hire a Financial Advisor?, the don’t have the time or expertise to
balance, 2020 know if you’re building retirement
savings that can last.
06 800-200-9838
Planning Your Retirement
Waiting to invest can cost you
$100 monthly investment in Age Amount amassed by age 65
a tax-deductible Individual
25 $349,100
Retirement Account (IRA)
earning 8% per year 35 $149, 035
*This hypothetical illustration is not intended to reflect the actual
performance of any particular security. Future performance cannot be
guaranteed and investment yields will fluctuate with market conditions.
79%
Starting to save as early as
possible matters.
Time on your side means
compounding can have Potential boost in wealth at age 65 over
significant impacts on your a 20-year period when choosing to invest
future savings. And, once in your company’s retirement plan.
you’ve started, continuing to Source: Bridging the Gap Between 401(k)
increase and maximize your Sponsors and Participants, T.Rowe Price,
401(k) contributions is key. 2020
Marginal Taxes Rates in 2021:
For tax year 2021, the top tax rate remains 37% for individual single taxpayers with
incomes greater than $523,600 ($628,300 for married couples filing jointly). The other
rates are:
35%, for incomes over $209,425 ($418,850 for married couples filing jointly);
32% for incomes over $164,925 ($329,850 for married couples filing jointly);
24% for incomes over $86,375 ($172,750 for married couples filing jointly);
22% for incomes over $40,525 ($81,050 for married couples filing jointly);
12% for incomes over $9,950 ($19,900 for married couples filing jointly).
The lowest rate is 10% for incomes of single individuals with incomes of $9,950 or less
($19,900 for married couples filing jointly).
800-200-9838 07
Planning Your Retirement
As decades go by, you’re likely full swing
into your career...
... and your income probably reflects Over 50? You can invest up to $19,500
that. However, the challenges to saving into your retirement plan/401(k).
for retirement start coming from large
As you enter your 50s and 60s,
competing expenses: a mortgage,
you’re ideally at peak earning years
raising children and saving for their
with some of your major expenses,
college.
such as a mortgage or child-rearing,
behind you or soon to be in the
One of the classic planning conflicts is
rearview mirror. This can be a good
saving for retirement versus saving for
time to consider whether you have
college. Most financial planners will tell
the ability to boost your retirement
you that retirement should be your top
savings goal to 20% or more of your
priority because your child can usually
income. For many people, this could
find support from financial aid while
potentially be the last opportunity
you’ll be on your own to fund your
to stash away funds.
retirement.
In 2020, workers age 50 or older can
How much we recommend that you invest up to $19,500 into their
invest toward retirement is always based retirement plan/401(k). Once they
on your unique financial situation and meet this limit, they can add an
goals. However, consider investing a additional $6,500 in catch-up
minimum of 10% of your salary toward contributions. These limits are
retirement through your 30s and 40s. So adjusted annually for inflation.
long as your individual circumstances If you’re over 50, you may be eligible
allow, it should be a goal to maximize to use a catch-up contribution
your employer’s contribution match. within your IRA.
08 800-200-9838
Planning Your Retirement
Why are 401(k)s and matching
contributions so popular?
$1,336
These retirement savings
vehicles give you the chance
to take advantage of three
main benefits:
A 2020 study from Financial Engines titled
Compound growth
“Missing Out: How Much Employer 401(k)
opportunities (as seen on
Matching Contributions Do Employees Leave
page 7)
on the Table?”, revealed that employees who
Tax saving opportunities
don’t maximize the company match typically
Matching contributions
leave $1,336 of potential extra retirement
Matching contributions are money on the table each year.
just what they sound like:
If your employer will match up to 3% of
Your employer matches your
your plan contributions and you only
own 401(k) contributions with
contribute 2% of your salary, you aren’t
money that comes from the
getting the full amount of your
company. If your employer
company’s potential match.
matches, the company
money typically matches up By bumping up your contribution by
to a certain percent of the just 1%, your company is now matching
amount you put in. 3% (the max) of your contributions for a
Unfortunately, many people total contribution of 6% of your salary.
don’t take full advantage of You aren’t leaving money on the table.
the employer match because
they’re not putting in enough
themselves.
At The Retirement Group, we are ready to help you
Take understand how your investments and financial
Action circumstances work together for your benefit.
800-200-9838 09
Your Pension Plan
Whether you’re changing jobs or
retiring...
... knowing what to do with your hard- Workers are far more likely to
earned retirement savings can be rely on their workplace defined
difficult. An employer-sponsored plan, contribution (DC) retirement
such as a pension and 401(k), may make plans as a source of income.
up the majority of your retirement
savings, but how much do you really "Getting help and
know about that plan and how it works? leveraging the financial
There are seemingly endless rules that planning tools and
vary from one retirement plan to the resources your company
next, early out offers, interest rate makes available can help
impacts, age penalties, and complex tax
you understand whether
impacts.
you are on track, or need to
Increasing your investment balance and make adjustments to meet
reducing taxes is the key to a successful your long-term retirement
retirement plan spending strategy. At
goals..."
the The Retirement Group, we can help
you understand how your oil & gas
Source: Schwab 401(k) Survey
industry retirement 401(k) fits into your
Finds Savings Goals and Stress
overall financial picture and how to
Levels on the Rise
make that plan work for you.
10 800-200-9838Your Pension Plan
PIP or (Performance Improvement Plan)
ExxonMobil has recently been issuing
a "Performance Improvement Plan" or
...PIP. When an employee receives a PIP it means that they fell into
ExxonMobil’s “Needs Significant Improvement” (NSI) performance
evaluation category, which makes up 8-10% of employees. The PIP is
essentially a severance offer to leave the company with an option to enroll
in an improvement process and potentially keep your job. In April,
ExxonMobil raised the number of employees who fall into the NSI category
from 3% to 10% of salaried US workers.
At The Retirement Group, we are ready to help you
Take understand how your investments and financial
Action circumstances work together for your benefit. Click here
to schedule an appointment
Source: XOM SPD
800-200-9838 11Your Pension Plan
Information for XTO Employees
The XTO and ExxonMobil benefits
plans were harmonized after the 2010..
..merger, however there are a variety In addition, the interest rates used
of exceptions that XTO employees to calculate your lump sum pension
need to be aware of. benefit are based on corporate
bond rates instead of the lower,
Your service as an XTO employee more favorable Treasury bond rates
prior to ExxonMobil is used for that grandfathered ExxonMobil
purposes of qualifying for certain employees are able to use. This
benefits, like retiree status, vesting, often produces a lower lump sum
and the lump sum option for the benefit, so it is even more critical
pension. Years of service prior to that you pay attention to the rates
ExxonMobil will not be counted, and the timing of your elections, so
however, in your pension formula for as not to leave any money on the
purposes of calculating your pension table when possible (see section on
payout. This is important to know pension interest rates for “Non-
when choosing the right time to Grandfathered Employees”).
leave the company in order to
maximize your benefits as well as the The Retirement Group XTO-focused
right time to commence your advisors can guide you through the
pension benefit. retirement decision-making
process and help you with your
retirement paperwork in an effort
Attend a TRG Webinar to maximize your retirement
Take for ExxonMobil benefits and minimize your risk of
Employees. Click here
Action making any mistakes.
to reserve your spot!
12 800-200-9838Your Pension Plan
Will ExxonMobil Freeze its Pension?
ExxonMobil has recently
suspended their 401(k) matching...
...program which raises the question, would
they freeze the pension program? What would
it look like if they did? A pension freeze would
mean employees won’t be able to accrue any
additional future benefits. They would however
be able to collect the benefits which they have
already earned. Over the past several decades
many corporations have moved to defined
contribution (DC) plans and moved away from
defined benefit (DB) plans.
Companies freeze or off-load DB pension plans
in order to cut down on their current pension
obligations. By making the switch from a DB
plan to a DC plan corporations can also shift
risk from the company to the workers. The
trend is good for investors because companies
who relieve themselves of pension debt
become less risky investments. However this
trend can negatively impact employees who
often rely on those DB plans for their
retirement years.
At The Retirement Group, we are ready to help you
Take understand how your investments and financial
Action circumstances work together for your benefit.
800-200-9838 13Your Pension Plan
Pension Formula
The ExxonMobil Pension Plan is a Defined Companies make mistakes:
Benefit Pension, based on years of service,
final average pay, and a social security If company over-projects offset:
offset, with potential age penalties. send in social security
statement and correct, this can
DB Pension (formula based) lead to a larger annuity/lump-
5 year vest or age 65 sum benefit
1.6% * YOS *FAP - SS offset If company under-projects
FAP (highest 36 consecutive offset: you get to keep the
months in last 10 years larger benefit
Be careful sending in your
Normal Retirement Age statement without first
Age 60 no AP reduction a retiree consulting a TRG advisor.
Age 65 no AP reduction as a terminee
55 + 15 = Retiree* = -5% p/yr under 60
*Earliest you can take pension is 50 if
on disability
At The Retirement Group, we are ready to help you understand
Take how your investments and financial circumstances work
Action together for your benefit.
14 800-200-9838Your Pension Plan Age Penalty Reductions Age Penalty Schedule for qualifying early retirees before age 60... Age Penalty Schedule for qualifying early retirees before age 55... 800-200-9838 15
Your Pension Plan
Age Penalty Reductions
If you are a pre-65
terminee you stand to face
severe age penalties for
each year before 65.
Pension Distribution Options
Lump Sum
Annuity (SLA + J&S + Period Certain
10/15/20)
Partial Lump Sum (75%/50%/25%)
with Partial Annuity
*Terminee only has Annuity
Options
PPA rate being transitioned in…for
some
High-quality corporate bonds and
updated mortality assumptions
prescribed by the IRS
16 800-200-9838Your Pension Plan
Pension Death Benefit - Active Employees
Less than 15 years of service - Can be paid as lump sum or basic
life annuity using beneficiary's life
Surviving Spouse Annuity expectancy
The Pension Plan pays surviving Lump sum rollover subject to
spouse annuity, equal to 1/2 of your inherited IRA rules (PPA 2006)
basic pension benefit earned up to
the date of your death (50% J&S
Annuity)
Spouse may commence benefit at
anytime from age 50-65 (your age)
subject to early commencement
penalties for terminees.
15 Years of service or more - Death
Benefit Pension
Calculated as if you retired on date
of death and elected the lump sum
option (Subject to early
commencement penalties
depending on age at death)
Payable to beneficiary designated
on "Special Beneficiary Designation
Form" (found on HR intranet).
Spousal consent required for non-
spouse beneficiary and must be
updated at age 35
800-200-9838 17Your Pension Plan Lump-Sum vs. Annuity Retirees who are eligible for a pension are often offered the choice of whether to actually take the pension payments for life, or receive a lump-sum dollar amount for the “equivalent” value of the pension – with the idea that you could then take the money (rolling it over to an IRA), invest it, and generate your own cash flows by taking systematic withdrawals throughout retirement. The upside of keeping the pension itself is that the payments are guaranteed to continue for life (at least to the extent that the pension plan itself remains in place and solvent and doesn’t default). Thus, whether you live 10, 20, or 30 (or more!) years in retirement, you don’t have to worry about the risk of outliving the money. In contrast, selecting the lump-sum gives you the potential to invest, earn more growth, and potentially generate even greater retirement cash flow. Additionally, if something happens to you, any unused account balance will be available to a surviving spouse or heirs. However, if you fail to invest the funds for sufficient growth, there’s a danger that the money could run out altogether and you may regret not having held onto the pension’s “income for life” guarantee. Ultimately, the “risk” assessment that should be done to determine whether or not you should the lump sum or the guaranteed lifetime payments that the pension offers depends on what kind of return must be generated on that lump-sum to replicate the payments of the annuity. After all, if it would only take a return of 1% to 2% on that lump-sum to create the same pension cash flows for a lifetime, there is little risk that you will outlive the lump-sum even if you withdraw from it for life(10). However, if the pension payments can only be replaced with a higher and much riskier rate of return, there is, in turn, a greater risk those returns won’t manifest and you could run out of money. 18 800-200-9838
Your Pension Plan
Interest Rates and Life Expectancy
Current interest rates, as well as your life expectancy at retirement, have a
large impact on lump sum payouts of defined benefit pension plans.
Interest Rates rose slightly for retirees commencing their ExxonMobil
Pension in Q4 of 2021. Interest rates rose significantly in Q2 and Q3 2021.
Rising rates hurt your lump sum value.
Interest rates are important for determining your lump sum option within
the pension plan. They have no impact on the annuity options. The
Retirement Group believes all ExxonMobil employees should run a detailed
cash flow analysis comparing their lump sum and annuity before making
their pension elections. As enticing as a high lump sum is, the annuity for all
or a portion of the pension may still be the superior option. Every person’s
situation is different, and a cash flow analysis will show you how your
pension choices now may play out in 30 years.
If interest rates are lower, they generate a higher lump sum payment. For
Q4 2021, the pension rates for grandfathered employees will be 2.25%. This is
a 1% increase from Q1 2021. That means most lump sums may decrease as
much as 12% from Q1 2021 to Q4 2021. If these rates keep rising we will
continue to see lump sum values go down.
When interest
rates rise by 1%
Lump-Sum payout and
bonds take a 8-10%
drop in value
800-200-9838 19Your Pension Plan
Interest Rates and Life Expectancy
For employees not grandfathered and retire or if you are better off working
under the segment rates, you will see longer or delaying the
rates in Q4 2021 stay relatively commencement of your pension
stagnant. The short-term, mid-term, benefit. If rates go up, how much are
and long-term rates are 0.62%, 2.77%, you okay with losing in your lump
and 3.43%. These low rates will help sum? Working longer will almost
generate higher lump sum options for always generate more income, but a
retirees commencing their pensions in reduction in future lump sum
Q4 2021. payments could mean working for
less money.
We continue to monitor interest rates
as rates from August to September will
tell us what Q1 2022 will look like. If
rates go higher, then lump sums will
go even lower. If rates stay the same or
go lower, lump sums will likely go up
again. If you need help determining
whether or not you are grandfathered,
let us know. Don’t hesitate to reach out
if you need help calculating your
pension options including the annuity
or lump sum. Once you have your
numbers, we will be happy to provide a
complimentary cash flow analysis or
update an existing one.
By knowing where you stand, you can
determine if Q4 2021 is the best time to
At The Retirement Group, we are ready to help you understand
Take how your investments and financial circumstances work
Action together for your benefit.
20 800-200-9838Your 401(k) Plan
ExxonMobil 401(k) Savings Plan
Employees are encouraged to enroll in When you retire, if you have balances
a 401(k) savings plan right away. You in your 401(k) plan, you will receive a
may invest on a before-tax and/or an Participant Distribution Notice in the
after-tax basis (regular or Roth) and mail. This notice will show the current
choose out of seven investment value that you are eligible to receive
options, with varying degrees of risk. from each plan and explain your
You can also roll over pre-tax and Roth distribution options. It will also tell you
amounts from other eligible plans. Your what you need to do to receive your
contribution: 6% to 20% of your pay + final distribution. Please call The
Company contribution (If you Retirement Group at (800)-900-5867
contribute at least 6%): 7% of your pay = for more information and we can get
Total Savings: 13% to 27% of your pay you in front of an XOM-focused
advisor.
Vesting
As a participant, you vest in the Next Step:
company match after three years of Watch for your Participant
vesting service, at age 65, or at death. If Distribution Notice and Special Tax
you terminate employment with less Notice Regarding Plan Payments.
than three years of service, you forfeit These notices will help explain your
the company match, but keep the options and what the federal tax
remainder. implications may be for your
vested account balance.
In addition, if you have an account in an
"What has Worked in Investing" &
eligible plan of a former employer, you
"8 Tenets when picking a Mutual
may be eligible to roll over a
Fund".
distribution from that account to the
To learn about your distribution
Savings Plan.
options, call The Retirement Group
Note: If you contribute at least 6 at (800)-900-5867. Click our e-
percent of your pay, you will receive a brochure for more information on
company match of 7 percent of your "Rollover Strategies for 401(k)s"
pay. Use the XOM Online Beneficiary
Designation to make updates to
your beneficiary designations, if
needed.
800-200-9838 21Your 401(k) Plan
Company Match
ExxonMobil has recently announced they will no longer match their
employee’s contributions to their retirement savings plans. These benefits will
officially be suspended starting October 1st, 2020.
Right now, ExxonMobil has two savings plans available to employees:
1. The U.S. ExxonMobil Savings Plan (EMSP)
a. The company’s current policy for the EMSP is to match, “a 6% minimum
employee contribution with 7% of the participant’s pay.”
2. The U.S. Supplement Savings Plan (SSP)
a. The SSP is a separate plan which, “provides the continuation of the
company match amounts beyond certain IRS-prescribed dollar
contribution figures,” (“U.S. ExxonMobil Savings Plan Changes”).
The Matching program for both of these plans has been suspended
indefinitely since October 1st, 2020.
22 800-200-9838Your 401(k) Plan
In-Service Withdrawals
Generally speaking, you can withdraw
amounts from your account ...
... while still employed under the instead of a withdrawal to meet your
circumstances described below. financial needs. Unlike withdrawals,
loans must be repaid, and are not
It’s important to know that certain
taxable (unless you fail to repay them).
withdrawals are subject to regular
In some cases, as with hardship
federal income tax and, if you’re
withdrawals, you are not allowed to
under age 59½, you may also be
make a withdrawal unless you have
subject to an additional 10% penalty
also taken out the maximum available
tax. You can determine if you’re
plan loan.
eligible for a withdrawal, and request
one, online or by calling your
You should also know that the plan
company’s benefits center or human
administrator reserves the right to
resources department.
modify the rules regarding
Rolling Over Your 401(k) withdrawals at any time, and may
As long as the plan participant is further restrict or limit the availability
younger than age 72, an in-service of withdrawals for administrative or
distribution can be rolled over to an other reasons. All plan participants will
IRA. A direct rollover would avoid the be advised of any such restrictions, and
10% early withdrawal penalty as well they apply equally to all employees.
as the mandatory 20% tax
withholding. Your plan summary
outlines more information and
possible restrictions on rollovers and
withdrawals.
Because a withdrawal permanently
reduces your retirement savings and
is subject to tax, you should always
consider taking a loan from the plan
800-200-9838 23Your 401(k) Plan
Borrowing from your 401(k)
Should you? Maybe you lose your and you need it now. But, take a
job, have a serious health second to see how this could
emergency, or face some other adversely affect your retirement
reason that you need a lot of cash. plans.
Banks make you jump through too
Consider these facts when deciding
many hoops for a personal loan,
if you should borrow from your
credit cards charge too much
401(k). You could:
interest, and … suddenly, you start
looking at your 401(k) account and Lose growth potential on the
doing some quick calculations about money you borrowed
pushing your retirement off a few Repayment and tax issues, if you
years to make up for taking some leave your employer.
money out.
We understand how you feel: It’s
your money,
At The Retirement Group, we are ready to help you
Take
understand how your investments and financial
Action circumstances work together for your benefit.
24 800-200-9838Your 401k Plan Net Unrealized Appreciation (NUA) When you qualify for a distribution you have three options: Roll-over your qualified plan to an IRA and continue deferring taxes. Take a distribution and pay ordinary income tax on the full amount. Take advantage of NUA and reap the benefits of a more favorable tax structure on gains. How does Net Unrealized Appreciation work? First an employee must be eligible for a distribution from their qualified plan; generally at retirement or age 59 ⁄ , the employee takes a "lump-sum" distribution from the plan, distributing all assets from the plan during a 1 year period. The portion of the plan that is made up of mutual funds and other investments can be rolled into an IRA for further tax deferral. The highly appreciated company stock is then transferred to a non-retirement account. The tax benefit comes when you transfer the company stock from a tax- deferred account to a taxable account. At this time you apply NUA and you incur an ordinary income tax liability on only the cost basis of your stock. The appreciated value of the stock above its basis is not taxed at the higher ordinary income tax but at the lower long-term capital gains rate, currently 15%. This could mean a potential savings of over 30%. 800-200-9838 25
Your 401(k) Plan
IRA Withdrawal
Your retirement assets may consist of
several retirement accounts ...
... IRAs, 401(k)s, taxable accounts, and Two flexible distribution options for
others. your IRA
So, what is the most efficient way to When you need to draw on your IRA for
take your retirement income? income or take your RMDs, you have a
You may want to consider meeting few choices. Regardless of what you
your income needs in retirement by choose, IRA distributions are subject to
first drawing down taxable accounts income taxes and may be subject to
rather than tax-deferred accounts. penalties and other conditions if you’re
under 59½.
This may help your retirement assets
last longer as they continue to Partial withdrawals: Withdraw any
potentially grow tax deferred. amount from your IRA at any time. If
you’re 72 or over, you’ll have to take at
You will also need to plan to take the
least enough from one or more IRAs to
required minimum distributions
meet your annual RMD.
(RMDs) from any employer-
sponsored retirement plans and Systematic withdrawal plans: Structure
traditional or rollover IRA accounts. regular, automatic withdrawals from
your IRA by choosing the amount and
That is due to IRS requirements for
frequency to meet your retirement
2020 to begin taking distributions
income needs. If you’re under 59½, you
from these types of accounts when
may be subject to a 10% early
you reach age 72. If you do not, the
withdrawal penalty (unless your
IRS may assess a 50% penalty on the
withdrawal plan meets Code Section
amount you should have taken.
72(t) rules).
There is new legislation that allows
Your tax advisor can help you understand
individuals who didn’t turn 70½ by
distribution options, determine RMD
the end of 2019 to take RMDs on April
requirements, calculate RMDs, and set up
1 of the year they turn 72.
a systematic withdrawal plan.
26 800-200-9838Your Benefits
Life Insurance Plan
At ExxonMobil, if you have 10 years of
service and are at least 50 years of age...
... you may be able to continue your Disability Plan
employee-paid coverage. No action is The disability plan provides various
required by you to continue your levels of income replacement during
coverage but check with ExxonMobil. The periods of both short-term and long-
cost of your coverage, however, could term work absences due to illness or
increase. Generally, your contributions as injury, available immediately or after
a retiree will be higher than those you pay a year of service, respectively.
as an employee.
Short-Term Disability
After you retire, you can reduce the If you are disabled due to a work-
amount of supplementary coverage you related illness or injury, you are
have at any time. The change will take eligible for up to 52 weeks of full pay.
effect on the first of the following month. If the illness or injury is not related to
In some cases, you may be able to your work, benefits continue as
purchase additional supplementary determined by your years of service.
coverage of one times pay (within 31 days You can re-qualify for your full
of retirement) if your retiree basic life schedule of short-term disability
insurance is less than one times your benefits by working 26 weeks after
active pay. last having received full-pay benefits.
Note: If you stop paying supplementary The plan also provides a voluntary
contributions, your coverage will end. You program to help when rehabilitation
will not be able to reinstate it. Please read and retraining are imminent.
the ExxonMobil SPD for more details.
At The Retirement Group, we are ready to help you
Take
understand how your investments and financial
Action circumstances work together for your benefit.
800-200-9838 27Your Benefits
What Happens If Your Employment ExxonMobil Beneficiary Designations
Ends
As part of your retirement and estate
Your life insurance coverage and any planning, it’s important to name
optional coverage you purchase for someone to receive the proceeds of
your spouse/domestic partner and/or your benefits programs in the event of
children ends on the date your your death. That’s how XOM will know
employment ends, unless your whom to send your final
employment ends due to disability. If compensation and benefits. This can
you die within 31 days of your include life insurance payouts and any
termination date, benefits are paid to pension or savings balances you may
your beneficiary for your basic life have.
insurance, as well as any additional
life insurance coverage you elected. Next Step:
When you retire, make sure that
Note: you update your beneficiaries. XOM
You may have the option to has an Online Beneficiary
convert your life insurance to an Designation form for life events
individual policy or elect such as death, marriage, divorce,
portability on any optional child birth, adoptions, etc.
coverage.
If you stop paying supplementary
contributions, your coverage will
end.
If you are at least 65 and you pay
for supplemental life insurance,
you should receive information in
the mail from the insurance
company that explains your
options.
Make sure to update your
beneficiaries. See the SPD(4) for
more details.
28 800-200-9838Social Security & Medicare
For many retirees, understanding and
claiming Social Security can be difficult ...
... but identifying optimal ways to They can help determine your
claim Social Security is essential to eligibility, get you and/or your eligible
your retirement income planning. dependents enrolled in Medicare or
Social Security benefits are not provide you with other government
designed to be the sole source of program information.
your retirement income, but a part of
your overall withdrawal strategy. Year of birth Full retirement age
Knowing the foundation of Social 1943-1954 66
Security, and using this knowledge to 1955 66 and 2 months
your advantage, can help you claim 1956 66 and 4 months
your maximum benefit. 1957 66 and 6 months
It’s your responsibility to enroll in 1958 66 and 8 months
Medicare parts A and B when you 1959 66 and 10 months
first become eligible — and you must 1960+ 67
stay enrolled to have coverage for
For more in-depth information on
Medicare-eligible expenses. This
Social Security, please call us.
applies to your Medicare eligible
dependents as well.
Check the status of
You should know how your retiree your Social Security
medical plan choices or Medicare benefits before you
eligibility impact your plan options. Take retire. Contact the
U.S. Social Security
Before you retire, contact the U.S. Action
Social Security Administration Administration, your
directly at 800-772-1213, call your local local Social Security
Social Security Office or visit ssa.gov. office, or visit ssa.gov.
800-200-9838 29Social Security & Medicare
Are you eligible for Medicare ...
or will be soon?
If you or your dependents are For details on coordination of
eligible after you leave your oil & gas benefits, refer to your summary plan
industry company, Medicare description.
generally becomes the primary
coverage for you or any of your If you or your eligible dependent
dependents as soon as they are don’t enroll in Medicare Parts A and
eligible for Medicare. This will affect B, your provider can bill you for the
your company-provided medical amounts that are not paid by
benefits. Medicare or your company-specific
medical plan … making your out-of-
You and your Medicare-eligible pocket expenses significantly higher.
dependents must enroll in Medicare
Parts A and B when you first become According to the Employee Benefit
eligible. Medical and MH/SA benefits Research Institute (EBRI), Medicare
payable under the company- will only cover about 60% of an
sponsored plan will be reduced by individual’s medical expenses. This
the amounts Medicare Parts A and B means a 65-year-old couple, with
would have paid whether you average prescription-drug expenses
actually enroll in them or not. for their age,
Projected annual Medicare costs for an individual: Part B and Part D premiums
Year Age Part B Part D Annual B+D
2030 75 $3,328 $1,636 $4,874
2020 65 $1,725 $871 $2,596
2040 85 $6,078 $3,070 $9,148
30 800-200-9838Social Security & Medicare
Time to retirement
How we can help: Several 2 years In
years or less retirement
Familiarize you with individual healthcare plans
Estimate your healthcare costs in retirement
Design an overall retirement plan for you
Incorporate healthcare costs into your plan
Manage your plan to help you achieve your goals
Explain the basics of Medicare
Familiarize you with the Medicare enrollment process
Help you avoid coverage delays and possible penalties
will need $259,000 in savings to have a
Get Medicare
90% chance of covering their
Take prescription
healthcare expenses. A single male will
drug information by
need $124,000 and a single female, Action
visiting medicare.gov.
thanks to her longer life expectancy,
will need $140,000.
If you become Medicare eligible
Check your plan summary to see if for reasons other than age, you
you’re eligible to enroll in Medicare must contact your company’s
Parts A and B. benefit center about your status.
Source: XOM Summary Plan Description, 2019
800-200-9838 31Divorce
The ideas of happily ever after and
until death do us part won’t happen ...
... for 28% of couples over the age of
50.3. Most couples saved together for Provide your company
decades, assuming they would retire with any requested
together. After a divorce, they face documentation to avoid
the expenses of a pre-or post- having your pension
retirement life, but with half their benefit delayed or
savings. Take suspended. To find out
If you’re divorced or in the process of Action more information on
divorcing, your former spouse(s) may strategies if divorce is
have an interest in a portion of your affecting your
retirement benefits. Before you can retirement benefits,
start your pension — and for each please give us a call.
former spouse who may have an
interest — you’ll need to provide your A copy of the court-filed
company with the following Qualified Domestic Relations
documentation: Order (QDRO)
A copy of the court-filed You’ll need to submit this
Judgment of Dissolution or documentation to your company’s
Judgment of Divorce along with online pension center regardless of
any Marital Settlement how old the divorce or how short
Agreement (MSA) the marriage.
Source: The Retirement Group, “Retirement Plans - Benefits and Savings,”
U.S. Department of Labor, 2019; “Generating Income That Will Last
Throughout Retirement,” Fidelity, 2019
32 800-200-9838Divorce
Social Security and Divorce Unlike with a married couple,
You can apply for a divorced spouse’s your ex-spouse doesn’t have
benefit if the following criteria are met: to have filed for Social
Security before you can apply
You’re at least 62 years of age. for your divorced spouse’s
You were married for at least 10 benefit.
years prior to the divorce.
spouse’s survivor benefit if the
You are currently unmarried.
following are true:
Your ex-spouse is entitled to Social
Security benefits. Your ex-spouse is deceased
Your own Social Security benefit You are at least 60 years of age
amount is less than your spousal You were married for at least 10
benefit amount, which is equal to years prior to the divorce
one-half of what your ex’s full You are single (or you remarried
benefit amount would be if claimed after age 60)
at Full Retirement Age (FRA). In the process of divorcing?
Unlike with a married couple, your ex- If your divorce isn’t final before your
spouse doesn’t have to have filed for retirement date, you’re still
Social Security before you can apply for considered married. You have two
your divorced spouse’s benefit, but this options:
only applies if you’ve been divorced for Retire before your divorce is
at least two years and your ex is at least final and elect a joint pension of
62 years of age. If the divorce was less at least 50% with your spouse —
than two years ago, your ex must or get your spouse’s signed,
already be receiving benefits before notarized consent to a different
you can file as a divorced spouse. election or lump sum.
Delay your retirement until after
Divorce doesn’t even disqualify you your divorce is final and you can
from survivor benefits. You can claim a provide the required divorce
divorced documentation.
Source: The Retirement Group, “Retirement Plans - Benefits and Savings,” U.S. Department of
Labor, 2019; “Generating Income That Will Last Throughout Retirement,” Fidelity, 2019
800-200-9838 33Survivor Checklist
In the unfortunate event that you aren’t
able to collect your benefits, your survivor
will be responsible for taking action.
What your survivor needs to do: need to be prepared with
enough savings to bridge at
Report your death. Your spouse, a
least one month between the
family member or even a friend
end of your pension
should call your company’s benefits
payments and the beginning
service center as soon as possible to
of his or her own pension
report your death.
payments.
Collect life insurance benefits. Your
spouse, or other named beneficiary,
will need to call your company’s If your survivor has medical
benefits service center to collect life coverage through your
insurance benefits. company:
If you have a joint pension: Decide whether to keep
Start the joint pension payments. medical coverage.
The joint pension is not automatic. If your survivor is enrolled as
Your joint pensioner will need to a dependent in your
complete and return the paperwork company-sponsored retiree
from your company’s pension center medical coverage when you
to start receiving joint pension die, he or she needs to
payments. decide whether to keep it.
Be prepared financially to cover Survivors have to pay the full
living expenses. Your spouse will monthly premium.
34 800-200-9838Life After Your Career
While you may be ready for some rest
and relaxation, without the stress ...
... and schedule of your full-time career, it Emotional benefits of
may make sense to you financially, and
working
emotionally, to continue to work.
You might find yourself with
very tempting job
Financial benefits of working opportunities at a time when
Make up for decreased value of savings or you thought you’d be
investments. Low interest rates make it great withdrawing from the
for lump sums but harder for generating workforce.
portfolio income. Some people continue to
Staying active and involved.
work to make up for poor performance of
Retaining employment, even if
their savings and investments.
it’s just part-time, can be a
Maybe you took a company offer and left great way to use the skills
earlier than you wanted and with less you’ve worked so hard to build
retirement savings than you needed. Instead over the years and keep up
of drawing down savings, you may decide to with friends and colleagues.
work a little longer to pay for extras you’ve
Enjoying yourself at work. Just
always denied yourself in the past.
because the government has
Meet financial requirements of day-to-day set a retirement age with its
living. Expenses can increase during Social Security program doesn’t
retirement and working can be a logical and mean you have to schedule
effective solution. You might choose to your own life that way. Many
continue working in order to keep your people genuinely enjoy their
insurance or other benefits — many employment and continue
employers offer free to low cost health working because their jobs
insurance for part-time workers. enrich their lives.
800-200-9838 35Sources
“National Compensation Survey: Employee Composite Corp Bond Rate history (10
Benefits in the United States, March 2019," years)http://www.irs.gov/retirement/arti
Bureau of Labor Statistics, U.S. Department cle/0,,id=123229,00.html
of Labor. https://www.irs.gov/retirement-
“Generating Income That Will Last plans/composite-corporate-bond-rate-
throughout Retirement.” Fidelity, 22 Jan. table
2019, IRS 72(t) code:
www.fidelity.com/viewpoints/retirement/in https://www.irs.gov/retirement-
come-that-can-last-lifetime. plans/plan-participant-
“Retirement Plans-Benefits & Savings.” U.S. employee/retirement-topics-tax-on-
Department of Labor, 2019, early-distributions
www.dol.gov/general/topic/retirement. Missing out: How much employer 401(k)
XOM Summary Plan Description, 2019 matching contributions do employees
https://seekingalpha.com/article/4268237- leave on the table?
order-withdrawals-retirement-assets Jester Financial Technologies,
https://www.aon.com/empowerresults/ensu Worksheet Detail - Health Care Expense
ring-retirees-get-health-care-need/ Schedule
8 Tenets when picking a Mutual Fund e- Social Security Administration. Benefits
book Planner: Income Taxes and Your Social
Determining Cash Flow Need in Security Benefits. Social Security
Retirement e-book Administration. Retrieved October11,
Early Retirement Offers e-book 2016 from
Lump Sum vs. Annuity e-book https://www.ssa.gov/planners/taxes.htm
Social Security e-book l
Rising Interest Rates e-book http://hr.chevron.com/northamerica/us/
Closing The Retirement Gap e-book payprograms/executiveplans/dcp/
Rollover Strategies for 401(k)s e-book https://www.lawinsider.com/contracts/1t
How to Survive Financially After a Job Loss Rmgtb07oJJieGzlZ0tjL/chevron-
e-book corp/incentive-plan/2018-02-02
Financial PTSD e-book
RetireKit
What has Worked in Investing e-book
Retirement Income Planning for ages 50-
65 e-book
Strategies for Divorced Individuals e-book
TRG Webinar
36 800-200-9838North-West Regional Office Mid-Atlantic Regional Office
Concord, CA Clarksville, MD
Phone: 1-800-200-9838 Phone: 1-267-262-6834
Mid-West Regional Office
St. Louis, MO
Phone: 1-314-858-9090 South-West Regional Office
Austin, TX
Phone: 1-281-766-0747
Y ou r
eq uest
R e nt ary
o m plim
C eK it
Reti r
Disclosure: Securities offered through FSC Securities Corporation (FSC) member FINRA/SIPC. Investment
advisory services offered through The Retirement Group, LLC. FSC is separately owned and other entities and/or
marketing names, products or services referenced here are independent of FSC. Office of Supervisory
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