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Union Pacific Employees Weighing Oklahoma: Lower Costs, Lower Taxes, and a Different Kind of Retirement

Healthcare Provider Update: Healthcare Provider for Union Pacific Union Pacific provides healthcare coverage primarily through its management benefits program, which may include options such as insurance plans, Medicare, and Medicaid for retirees. The specific providers associated with Union Pacific's healthcare offerings can vary and are typically outlined in their employee and retiree benefit guides. Potential Healthcare Cost Increases in 2026 As 2026 approaches, healthcare costs are expected to rise significantly, particularly for those enrolled in the Affordable Care Act (ACA) marketplace. Record premium hikes are anticipated, with over 22 million enrollees facing potential increases exceeding 75%-a consequence of expiring federal subsidies and aggressive rate hikes by major insurers. With employers also planning to shift more healthcare costs to employees through higher deductibles and out-of-pocket maximums, individuals may find themselves grappling with substantial financial burdens in their healthcare expenses next year. Click here to learn more

'Union Pacific employees weighing a move from California to Oklahoma should recognize that differences in state taxes, property values, and cost of living can influence how long their retirement savings last.' — Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Union Pacific employees evaluating retirement options can benefit from comparing states like California and Oklahoma, where differences in taxation and living expenses may directly impact long-term financial stability.' — Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

How taxes in California and Oklahoma impact retirees and their income.
The differences in cost of living, property values, and daily expenses between the two states.
Programs and lifestyle considerations, such as Tulsa Remote and health care access, that may influence relocation decisions.

The thought of leaving behind California's vibrant cities, golden beaches, and Mediterranean-like climate may seem unthinkable to many residents. The state continues to draw attention from around the world because of its world-class amenities, varied cultural life, and natural beauty. However, California's growing cost of living, high state taxes, and skyrocketing housing costs have put a heavy financial burden on those on fixed incomes like Social Security and pensions. Some employees at Union Pacific are therefore looking at alternatives that offer a more sustainable retirement way of life. Oklahoma is one place that is becoming more popular.

Due to advantageous tax laws, reduced housing prices, and even incentive programs like Tulsa Remote, hundreds of Californians have moved to Oklahoma in recent years. ¹ While Oklahoma may not be the best option for every retiree, there are sufficient financial differences between the two states that they should be carefully considered.

California versus Oklahoma Tax Comparisons

Retirement planning heavily relies on taxes, and there are significant disparities between California and Oklahoma. The tax code in California is particularly difficult for retirees who have several sources of income, according to Carlos Hernandez of Wealth Enhancement. Although Social Security benefits are not taxed in California, the state's progressive tax system applies to pensions, 401k contributions, and other retirement income. Rates can reach 12.3% for many taxpayers, while the highest incomes can pay up to 13.3%, ² which is the highest state income tax rate in the country.

In contrast, Oklahoma offers retirees 65 and older a $10,000 deduction on other types of retirement income in addition to exempting Social Security income from taxes. ³ Oklahoma's highest marginal income tax rate is 4.75%, ³ which is far lower than California's even without taking this deduction into account.

These differences can result in annual tax savings of thousands of dollars for seniors who receive both Social Security and pensions. Take, for instance, a person who receives $30,000 in Social Security benefits in addition to a $40,000 pension. The pension income would be subject to full state taxation in California. In Oklahoma, Social Security would be completely untaxed, $10,000 of the pension income would be exempt, and the remaining taxable pension amount would be subject to significantly lower rates. As a result, the tax burden is considerably lighter, giving the household budget more flexibility.

Cost of Living and Property Values

The financial equation consists of more than just taxes. The housing market in California puts additional financial strain on seniors, claims Kevin Won of Wealth Enhancement. California routinely has some of the highest property values in the country. The base property tax payment is still correlated with high market values, despite the fact that established safeguards like Proposition 13 restrict yearly increases in property tax assessments. The absolute cost is nevertheless high in comparison to national norms, even if householders 55 and older may relocate their tax base under specific circumstances. ⁴

The problem is made worse by insurance premiums. In California, plans that cover the danger of earthquakes or wildfires are not only costly, but they are also getting harder to obtain in high-risk locations.

The real estate market in Oklahoma paints a completely different picture. Compared to many California regions, the median home value is less than half. ⁵ Reduced property taxes are a direct result of lower property prices. Although Oklahoma does not provide tax-base transfers or unique senior exemptions like California does, retirees frequently still benefit from lower total valuations.

Additionally, Oklahoma benefits from a lower overall cost of living. Daily costs, such as groceries, utilities, and medical care, are often less than in California. Retirement savings can extend further thanks to the combined impact of lower housing, insurance, and daily expenses, which gives people greater flexibility in choosing their spending and lifestyle preferences.

Rewards Initiatives: Tulsa Remote

Tulsa Remote is one distinctive program contributing to Oklahoma's rising popularity. This program was started in 2018 with the goal of luring remote workers to Tulsa by providing cash incentives and opportunities for community integration. The program offers $10,000 to participants who agree to stay in Tulsa for a minimum of one year.

Over 60,000 applications have been submitted to Tulsa Remote since its launch, with almost 8,000 of those applications coming from California. ⁶ As a result, nearly 3,600 participants have relocated to Tulsa. ⁶ Despite focusing on working professionals rather than retirees, this program has helped spread awareness about Oklahoma's affordability and livability.

The Practical Financial Impact

The practical impact is better demonstrated by going over the previous financial case again. In California, a retiree with $40,000 in pension income and $30,000 in Social Security would pay high taxes; nevertheless, in Oklahoma, they would receive large benefits. Once the $10,000 exemption and reduced marginal rates are applied, the difference could result in yearly savings of thousands of dollars.

Beyond taxes, long-term financial consistency is strengthened by being able to buy a home for half as much, or less, than in many California markets. Over time, lower utility costs, lower insurance premiums, and overall cost-of-living reductions can add up to provide more discretionary income for leisure, travel, or building retirement stability.

In Conclusion

Although California is still a popular place to live, seniors are finding it increasingly difficult to keep up with the state's high taxes, high property values, and overall cost of living. Oklahoma is a strong alternative because of its low tax rates, $10,000 retirement income exemption, reasonably priced housing market, and lower cost of living.

According to a recent analysis, retirees in Oklahoma could maintain their financial resources for roughly 51 years with $1.5 million in savings and Social Security benefits, far exceeding the 24 years estimated in California. ⁷ This difference is primarily due to Oklahoma's significantly lower annual cost of living (about $29,666) ⁷ than to California's high expenses.

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Sources:

1. MSN. ' Hundreds of Californians have been paid $10,000 to relocate to Oklahoma ,' by Hannah Fry. August 15, 2025.

2. Nerdwallet. ' California State Income Tax Rates and Brackets for 2024-2025 ,' by Sabrina Parys. June 5, 2025.

3. SmartAsset. ' Oklahoma Retirement Tax Friendliness .' 2025.

4. California State Board of Equalization. ' Transfer of Base Year Value for Persons Age 55 and Over - Propositions 60/90 .' 2025.

5. Forbes. ' Median Home Price by State ,' by Kiah Treece. July 29, 2025.

6. SF Gate. ' The surprising destination luring California transplants with $10,000 ,' by Tessa McLean. August 4, 2025.

7. CNBC. ' $1.5 million is the 'magic number' for retirement savings--here's how long it lasts in every U.S. state ,' by Mike Winters. Mar. 15, 2025.

What are the specific eligibility requirements for employees of Union Pacific Corporation to participate in the pension plan, and how might these requirements evolve as IRS regulations change? Understanding how Union Pacific Corporation aligns its eligibility criteria with broader IRS regulations can help employees assess their own eligibility for the pension plan, particularly in light of any new IRS guidelines issued for 2024.

Eligibility Requirements for Pension Plan Participation: Eligibility to participate in the Union Pacific Corporation pension plan is governed by specific criteria set forth in the plan documents. As of January 1, 2018, the plan was closed to new participants, meaning individuals hired on or after this date are not eligible. For existing employees, eligibility to accrue benefits continued provided they were active participants as of December 31, 2017, and remained in covered employment. Changes in IRS regulations could potentially alter these eligibility criteria by requiring adjustments to maintain compliance with legal standards, potentially affecting who can accrue benefits in the future.

How does Union Pacific Corporation calculate an employee's final average compensation for pension benefits? Given the potential for changes in compensation structures, it is essential for employees at Union Pacific Corporation to comprehend how their average compensation is determined and how this figure might impact their retirement planning.

Calculation of Final Average Compensation: The pension plan calculates an employee's final average compensation based on the average monthly compensation over the 36-consecutive month period out of the last 120 months of active participation that yields the highest average. This includes base pay, overtime, and certain incentive and bonus payments. Understanding this calculation is crucial for employees to appreciate how raises, bonuses, and other compensation changes might impact their pension benefits.

What forms of payment options are available to employees of Union Pacific Corporation when they choose to retire, and how do these options influence the total benefit received? Employees need detailed information on the different payment structures to make informed decisions that suit their financial needs in retirement.

Payment Options Available at Retirement: Union Pacific offers various payment options for pension benefits upon retirement. Employees can choose a lifetime annuity or opt for joint and survivor annuities, providing continued benefits to a designated beneficiary. Other options include certain annuities that guarantee payments for a set period, regardless of the employee's lifespan. These choices allow employees to tailor retirement benefits to their financial needs and family circumstances.

In what ways does Union Pacific Corporation integrate Social Security and Railroad Retirement benefits into the pension plan, and how does this integration affect the overall retirement income for employees? Employees should explore the implications of these benefits on their pensions to develop a comprehensive retirement income strategy.

Integration of Social Security and Railroad Retirement Benefits: The pension benefits are coordinated with Social Security or Railroad Retirement benefits through an offset formula in the pension plan. This integration reduces the pension benefit by a portion of the government retirement benefits projected at the time of retirement, reflecting that some of the funding for these benefits comes from Union Pacific. Employees need to understand how this interaction affects their total retirement income to plan effectively.

What strategies can employees of Union Pacific Corporation employ to maximize their pension benefits prior to retirement while adhering to IRS limits? Employees must be informed of practical steps they can take to enhance their benefits within the framework established by IRS guidelines.

Maximizing Pension Benefits: To maximize pension benefits under the IRS limits, Union Pacific employees can ensure they maximize their earnings during the final average compensation period, continue employment as long as possible to increase credited service, and make strategic decisions about retirement age and benefit commencement. Understanding the interplay of these factors with IRS contribution and benefit limits is essential for optimizing pension payouts.

How does the vesting schedule work within Union Pacific Corporation's pension plan, and what implications does this have for employees who leave the company before full vesting? An understanding of the vesting schedule is crucial for employees at Union Pacific Corporation to grasp the long-term benefits they might forfeit by leaving before they are fully vested.

Vesting Schedule: The vesting schedule is crucial as it determines an employee's entitlement to pension benefits upon leaving the company before retirement age. Union Pacific's plan requires employees to complete five years of vesting service to qualify for a vested benefit, which is payable as early as age 55. Employees considering leaving Union Pacific should be aware of how their vesting status might affect their pension entitlements.

What responsibilities do employees have to keep Union Pacific Corporation informed about their earnings records, particularly when claims for benefits arise, and what might happen if these records are not accurately reported? Employees should be aware of their duties to maintain their benefits and the potential consequences of noncompliance within the pension plan.

Responsibilities for Reporting Earnings: Employees are responsible for ensuring that Union Pacific has accurate records of their earnings to calculate pension benefits accurately. Failure to report or correct discrepancies in earnings records can lead to miscalculations in pension benefits, affecting retirement income. It's vital for employees to regularly review their earnings records and report any inaccuracies.

How does Union Pacific Corporation ensure compliance with ERISA regulations as they relate to employee retirement benefits, and what rights do employees have under these regulations? Employees of Union Pacific Corporation should familiarize themselves with their rights under ERISA to ensure they are adequately protected when claiming pension benefits.

Compliance with ERISA Regulations: Union Pacific ensures compliance with the Employee Retirement Income Security Act (ERISA) regulations, which protect employees' rights to their pension benefits. Employees have specific rights under these regulations, including the right to receive information about their pension plan, appeal denials of benefits, and sue for benefits or breaches of fiduciary duty. Awareness of these rights is important for employees to safeguard their benefits.

What happens to the pension benefits of employees of Union Pacific Corporation in the event of a company merger or acquisition, and how can employees prepare for these changes? Understanding the potential impacts of organizational changes on their pension benefits can enable employees to safeguard their retirement plans.

Impact of Company Mergers or Acquisitions: In the event of a merger or acquisition, employees' pension benefits could be affected. Union Pacific's pension plan provisions include terms for handling benefits under such circumstances. Employees should be proactive in understanding how these corporate changes might impact their pension benefits and seek clarity on their rights and options.

How can employees of Union Pacific Corporation contact the Benefits Group to inquire further about the pension plan and related questions? Clear guidance on contacting the Benefits Group will assist employees in accessing the information necessary to navigate their retirement options effectively.

Contacting the Benefits Group: Employees with questions or who need assistance regarding their pension plan can contact Union Pacific's Benefits Group. Having the contact information handy ensures that employees can promptly address concerns or seek guidance about their retirement benefits, aiding in effective retirement planning.