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Retirement planning is essential at any stage - and especially for ExxonMobil employees trying to navigate changing financial landscapes, says Michael Corgiat of the Retirement Group, a division of Wealth Enhancement Group. So start early, diversify and meet with a financial advisor regularly to review your retirement plan and ensure it's working for you long term, 'she said.'
The NCOA survey shows that robust retirement planning is absolutely necessary for ExxonMobil employees, says Brent Wolf of the Retirement Group, a division of Wealth Enhancement Group. Comprehensive planning now can secure your financial comfort in retirement - so evaluate and adjust your plans with the help of a seasoned financial advisor, 'she said.'
What is it that we will discuss here:
1. Early Retirement Planning - Why It's Important:Learn why planning your retirement early can protect your nest egg financially when you reach your golden years.
2. Personal Finance Fundamentals: A quick exam covering basic personal finance knowledge to gauge your readiness for future financial challenges.
3. Retirement Planning Strategies: Information about effective retirement planning including investment diversification and understanding different retirement accounts.
A survey by the National Council on Aging in 2021 found that 60% of adults over age 60 have not created a retirement plan. This is surprising considering most of those age groups are approaching or retired. Making a retirement plan can prepare people for costs associated with retirement such as healthcare and living expenses. With the proper plan, retirees can grow their retirement savings and have enough to last them through the golden years.
So important is retirement planning - so we created a test to see how well you understand personal finance. This short exam measures your basic knowledge. Learn about our ExxonMobil clients below.
Questions
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How much liquid, low-risk savings should you have for emergencies?
A. One or three months' worth of expenses.
B. Three or six months' worth of expenses.
C. Six or twelve months' worth of expenses.
D. It depends
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Divestiture can remove risk from your portfolio.
A. True
B. False
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What is a key benefit of a 401(k) plan?
A. Yes, you can withdraw money at any time for things like a new car purchase.
B. You pay no tax on some of your compensation through the plan.
C. You might get an employer match - free money - if you qualify.
D. None of the above.
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Not all of the money in a bank or credit union account is protected.
A. True
B. False
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Which of the following is typically the best long-term strategy for you.
A. Investing as conservatively as possible to limit loss possibility.
B. Investing equal amounts in stocks, bonds, and cash investments.
C. Put all of your money in stocks.
D. Too little info.
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What does APR stand for in debt speak?
A. Actual percentage rate B. Annual personal rate C. Annual percentage rate D. Actual personal return
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The safest investments are mutual funds.
A. True B. False
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I've got time to save for my retirement from ExxonMobil. That is not something I have to think about right now.
A. True B. False
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Which benefits are associated with a Roth IRA?
A. A Roth IRA may pay taxes-free in retirement. B. Investors can deduct their Roth IRA contributions from taxes. C. Any reason for withdrawal by investors after five years of holding is tax-free. D. None of the above.
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What is considered good credit?
A. 85 or above
B. 500 or above
C. B or above
D. 700 or above
Answers
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D. It is conventional wisdom to put aside three to six months of living expenses in liquid savings vehicles such as a bank savings account or money market account. But that depends on your specific situation. With a job with ExxonMobil that is secure, your spouse's job that is fairly secure (for our ExxonMobil clients who are married) and other assets, you may only need three months of emergency savings. Or you could be a business owner in a volatile industry and need a year's worth of cash or more to weather rough times.
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B -False. Diversification is a sensible investment strategy that spreads your investment dollars across a variety of securities and asset classes but it does not eliminate risk nor guarantee a profit for our ExxonMobil clients. You keep losing money.
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C. Some employers offer a matching program, which is like getting free money to invest. If the ExxonMobil plan matches your contribution, contribute at least enough to take advantage of that. Some matching programs have a vesting schedule so you gradually get the right to match contributions and earnings on those dollars. If you selected B, you may find this a little deceptive. Contributions to traditional 401(k) plans are tax-deferred but not eliminated entirely. You pay taxes on your contributions and earnings when you take a distribution from the plan. Also, distributions taken before age 59½ could be subject to a 10% tax penalty. Exceptions exist.
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A -- True. The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Share Insurance Fund (NCUSIF) each insure deposits in federally insured banks and credit unions up to USD 250,000 per depositor, per ownership category (single account, joint account, retirement account, trust account), per insured institution. Neither the FDIC nor NCUSIF covers losses in equities, bonds, mutual funds, life insurance policies, annuities or municipal securities. They do not also insure safe-deposit box contents or Treasury bill investments.
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D. We recommend our ExxonMobil clients consult a financial professional before making a decision about a strategy. Among other things, he or she will consider your objectives, risk tolerance, and time horizon when recommending an appropriate investment strategy for you.
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C. The acronym APR stands for annual percentage rate. This is the rate at which credit card, mortgage, and other loan issuers inform borrowers the approximate annual cost of borrowing funds minus fees and costs. The APR differs from the declared interest rate on a loan, which is usually lower than the APR because fees and other costs are not included. We tell ExxonMobil clients to shop the APRs of different loans to make sound financial decisions. However, compare the APRs for fixed-rate loans versus adjustable-rate loans for mortgages carefully because the APR is not the maximum interest rate a loan may charge.
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B -- False. The capital of many investors is pooled into a basket of securities that are invested for some particular end. With this 'diversification,' mutual funds are usually a good form of risk management. But we remind our ExxonMobil clients that the inherent risk of any mutual fund depends largely on the securities categories that it holds. Pick a mutual fund carefully so its investment objective matches yours. Check out the prospectus for the fund - it contains important information about risks, fees and expenses, and details about specific holdings.
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B -- False. Retirement is decades away but you can invest now for retirement. This is because small amounts like USD 50 per month can add up because of compounding - when your returns actually earn returns themselves. That means your money works for you!
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A. The biggest advantage to a Roth IRA is the tax-free retirement income it provides. The contributions are subject to income limits & are not deductible on a tax basis. After five years of holding, withdrawals are allowed if 'qualified.' Exceptions to this include withdrawals made after the account holder dies, becomes disabled, or turns 59 and a half years old, or when the account holder withdraws up to USD 10,000 (lifetime-maximum) for a first home purchase.
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D. No organization generally defines what constitutes a 'good' credit score because credit scores are calculated differently by different organizations. Generally, though, a credit score of 700 or higher would likely go in the favor of a credit applicant.
Retirement planning is like tending a garden. So much as a gardener would choose the right tools, seeds, and soil for his or her garden, retirees and those approaching retirement should plan for a comfortable retirement with the right investments and health care. Both take patience, attention to detail, and regular maintenance to work properly. Like a garden that makes the gardener happy and fulfilled, a planned retirement can provide security and fulfillment for those who have worked hard all their lives.
Sources:
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National Council on Aging. 'Addressing the Nation's Retirement Crisis: The 80%.' National Council on Aging , 30 Aug. 2024, www.ncoa.org .
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TIAA Institute-GFLEC. 'Financial Literacy and Retirement Readiness among Workers Age 40 and Older.' TIAA Institute-GFLEC Personal Finance Index , 2022, www.tiaa.org .
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Schroders. 'U.S. Retirement Survey 2021.' Schroders , 18 Mar. 2021, www.schroders.com .
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National Council on Aging. 'Get the Facts on Older Americans.' National Council on Aging , 2023, www.ncoa.org .
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AARP. 'New Retirement Survey.' AARP , 2024, www.aarp.org .
How does the ExxonMobil Savings Plan compare against typical retirement savings plans, and what unique features does it offer that can benefit employees approaching retirement? Additionally, can you elaborate on the necessary steps ExxonMobil employees should take within the savings plan to ensure maximum contributions and employer match during their service years?
ExxonMobil Savings Plan: ExxonMobil's Savings Plan offers flexibility with pre-tax, after-tax, and Roth contributions, and features a 7% company match for the first 6% of employee contributions, a unique benefit compared to typical plans. Employees should contribute the maximum percentage to receive the full match and regularly review their investment allocations through the Voya platform(ExxonMobil_2024_ExxonMo…).
What are the eligibility criteria for employees to participate in the ExxonMobil Pension Plan, and how is the retirement benefit calculated? As employees consider their long-term savings strategy, how does the option of a lump-sum distribution versus an annuity influence their financial planning at ExxonMobil?
ExxonMobil Pension Plan: Employees are automatically enrolled and eligible for benefits after five years of service, with full retirement benefits offered at 55 with 15 years of service. The pension is calculated based on 1.6% of final average pay multiplied by years of service, minus a social security offset. Lump-sum and annuity options affect long-term financial planning, with lump sums offering immediate flexibility while annuities provide a steady income(ExxonMobil_2024_ExxonMo…).
In what ways does the ExxonMobil Employee Assistance Program (EAP) support employees during personal or family crises, and what confidentiality measures are in place to protect their privacy? Additionally, how can ExxonMobil employees access these services, and what are the key resources available through this program?
Employee Assistance Program (EAP): ExxonMobil's EAP provides confidential counseling services for personal and family issues like anxiety, addiction, and family conflict. Services are accessible by phone, video chat, or text, with privacy strictly protected. Employees can contact ComPsych for guidance and support through the GuidanceNow app or website(ExxonMobil_2024_ExxonMo…).
With the introduction of Flexible Spending Accounts (FSAs) at ExxonMobil, how do these accounts help employees manage their health care and dependent care expenses more effectively? What guidelines should employees follow to ensure they maximize their tax advantages while complying with IRS regulations during the enrollment process?
Flexible Spending Accounts (FSAs): FSAs at ExxonMobil allow employees to reduce taxable income by contributing pre-tax dollars to healthcare or dependent care expenses. Employees should estimate their expenses carefully during the enrollment period and comply with IRS rules, ensuring they submit claims by April 15th of the following year(ExxonMobil_2024_ExxonMo…).
How does ExxonMobil define "work-life balance," and what specific benefits and programs are in place to support this philosophy for employees? Can you discuss how employees can utilize these options, such as flexible schedules and leave of absence policies, without negatively impacting their career progression within the company?
Work-Life Balance: ExxonMobil promotes work-life balance with programs like “Flex Your Day,” allowing flexibility in work hours, and up to 20 days of back-up dependent care. Employees are encouraged to use these options strategically to maintain career progression while balancing personal obligations(ExxonMobil_2024_ExxonMo…).
In light of the various medical plan options offered at ExxonMobil, how should employees approach selecting the right plan to best meet their healthcare needs? What factors should they consider, including family health history and financial implications, when making their decisions?
Medical Plan Selection: ExxonMobil offers Aetna POS II and network-only options, allowing employees to choose between plans based on cost, coverage, and provider access. Employees should assess their family's healthcare needs, financial situation, and preferred providers when selecting the most appropriate plan(ExxonMobil_2024_ExxonMo…).
For ExxonMobil employees nearing retirement, what resources are available to help them understand the nuances of health benefits coordination through Medicare and their ExxonMobil coverage? How can they best navigate this transition, and what checkpoints should they be aware of to ensure they remain compliant with company policies during retirement?
Retirement Health Benefits and Medicare: ExxonMobil offers resources to help employees coordinate health benefits with Medicare upon retirement. Employees nearing retirement should explore their options through the Your Total Rewards portal and ensure compliance with company policies during the transition(ExxonMobil_2024_ExxonMo…).
What financial education resources does ExxonMobil provide to employees to promote informed decision-making about their retirement savings and benefits? Can you detail how programs like the Financial Fitness Program enable employees to strategically manage their finances and plan for retirement?
Financial Education Resources: ExxonMobil's Financial Fitness Program, provided in collaboration with Ernst & Young, helps employees manage their finances with resources such as EY Navigate and personalized financial planning. This program supports informed decision-making about retirement and savings strategies(ExxonMobil_2024_ExxonMo…).
As part of the benefits provided by ExxonMobil, how does the company facilitate employee participation in volunteer programs and charitable activities through the ExxonMobil Foundation? How can employees engage with these initiatives while also balancing their work commitments?
Volunteer Programs: Through the ExxonMobil Foundation, employees can engage in charitable activities via the Volunteer Involvement Program (VIP), which offers grants to nonprofits based on time spent volunteering. Participation in these programs is flexible, enabling employees to balance work commitments with volunteer efforts(ExxonMobil_2024_ExxonMo…).
How can ExxonMobil employees get in touch with benefits representatives to address specific questions about their retirement and savings plans? What are the recommended channels and best times to reach out for assistance to ensure they receive timely and relevant information about their options?
Contacting Benefits Representatives: Employees can reach out to the ExxonMobil Benefits Service Center at 833-776-9966 during business hours (8 a.m. to 4 p.m. CST) for assistance with retirement and savings plan questions. The Your Total Rewards portal also offers 24/7 access for reviewing and managing benefits(ExxonMobil_2024_ExxonMo…).
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