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ExxonMobil Employees: Should You Delay Your RMD When the S&P 500 Is Down?

ExxonMobil employees should carefully time their Required Minimum Distributions (RMDs) to avoid selling assets at reduced prices during market downturns, as strategic withdrawal planning can help preserve future portfolio growth and minimize unnecessary tax burdens. – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

ExxonMobil employees should consider the impact of market volatility on their RMD strategies, as delaying withdrawals during market downturns can allow for potential recovery, helping to protect long-term retirement assets and minimize tax exposure. – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

Impact of market fluctuations on RMD timing strategies
Differences between RMDs and Roth IRA conversions
Portfolio composition and tax-efficient approaches for ExxonMobil retirees

Navigating RMDs Amid Market Volatility

Market fluctuations can complicate income planning for retirees relying on distributions from retirement accounts. As of 2025, the IRS requires individuals aged 73 and older to take annual RMDs from tax-deferred accounts like 401(k)s and traditional IRAs. The RMD amount is calculated based on the account balance as of December 31 of the previous year, divided by a life expectancy factor provided by the IRS. Younger ExxonMobil retirees, while not subject to RMDs, may still need to make withdrawals to cover living expenses.

Historically, many have delayed their RMDs until year-end to better assess their annual income and potentially minimize tax implications. Others opt for monthly or quarterly distributions. However, with current market volatility affecting major indices like the Dow Jones Industrial Average, Nasdaq, and S&P 500, the timing of these withdrawals has become more consequential.

Challenges of Fixed RMD Calculations During Market Downturns

A key issue is that RMD calculations are based on the account value at the end of the previous year and do not adjust for market declines that may occur afterward. For instance, if a retiree's IRA was valued at $850,000 on December 31, 2024, their 2025 RMD would be approximately $33,000. If the market value drops to $790,000 by April 2025, the retiree is still obligated to withdraw the full $33,000, potentially requiring the sale of more shares at reduced prices.

Pam Krueger, founder of Wealthramp, highlights this predicament: Selling assets at reduced prices to meet a withdrawal requirement based on a higher previous value can be a double-edged sword.

Distinguishing Between RMDs and Roth IRA Conversions

A common misconception is treating RMDs and Roth IRA conversions similarly. While converting funds from a traditional IRA to a Roth IRA during market lows can be advantageous due to tax-free growth potential, RMDs involve mandatory withdrawals that are taxed and, if reinvested, may be subject to capital gains taxes.

George Gagliardi, a certified financial adviser in Massachusetts, advises handling RMDs and Roth conversions as separate strategies. He suggests using more stable assets, like short-term bonds, for RMDs to minimize the impact of market volatility, while reserving assets with higher growth potential for Roth conversions.

Importance of Portfolio Composition

The structure of a retirement portfolio significantly influences RMD strategies. Diversified portfolios typically include a mix of cash, bonds, stocks, and short-term securities. Rob Williams, managing director of financial planning at Schwab, emphasizes viewing the portfolio as a collection of distinct assets rather than a single entity.

Portfolios with low-volatility assets, such as Treasury bonds or short-term CDs, can provide liquidity for RMDs without necessitating the sale of equities during downturns. Implementing bond ladders with staggered maturity dates can help align asset availability with RMD schedules.

Considerations for Inherited IRAs

Inherited IRAs present additional complexities. Non-spouse beneficiaries are required to deplete the account within ten years, with RMDs enforced throughout this period. All distributions are taxed as ordinary income. B Capital

Scott Bishop, a Texas-based money manager, encountered a client contemplating early withdrawals from an inherited IRA due to market declines. He suggests a hybrid approach: withdrawing funds (after taxes) and reinvesting them in a taxable brokerage account. This strategy may result in future gains being taxed at lower capital gains rates, potentially reducing the overall tax burden.

Timing RMDs Strategically

While market volatility adds complexity to RMD timing, thoughtful planning remains essential. Since the RMD amount is fixed based on the previous year's account value, retirees have the opportunity to choose when to take distributions. Delaying withdrawals can allow for potential market recovery and defer associated taxes.

Pam Krueger advises against hastily selling assets during market lows, suggesting that waiting can provide both tax deferral and the chance for account value recovery.

Final Thoughts

In uncertain markets, it's important to resist impulsive decisions. The approach to accessing retirement funds—whether through RMDs, inherited IRA withdrawals, or broader income strategies—should focus on minimizing losses and maintaining portfolio value. For ExxonMobil retirees, this means adopting a methodical approach to withdrawals, utilizing diversified portfolios with components like cash reserves, short-term bonds, and strategically structured ladders to meet distribution needs without compromising future growth.

A Vanguard report from December 2023 indicates that taking RMDs later in the year has historically correlated with higher average portfolio values, as markets often recover from mid-year volatility. In years with presidential elections, the S&P 500 has averaged gains of 7.3% in the second half, suggesting that postponing RMDs may provide more favorable conditions for asset sales.

Analogy

Withdrawing your RMD during a market downturn is akin to selling your home during a housing slump because you must relocate; you may receive less than if you had waited for the market to rebound. By carefully timing withdrawals, retirees can retain more of their investment assets, similar to homeowners waiting for a seller's market. This is especially pertinent when mandatory distributions are based on higher account values from the previous year, regardless of current performance.

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Source:

1. Royal, James. How Required Minimum Distributions Impact Your Traditional IRA Balance. Investopedia , 15 Apr. 2025, www.investopedia.com/required-minimum-distributions-ira-impact-5185475 .

2. Riquier, Andrea. Should I Rush to Take My RMD While the S&P 500 Is Down, or Wait Until the End of the Year Like Normal? MarketWatch , 12 Apr. 2025, www.marketwatch.com/rmd-timing-strategy-s-p-500-2025-5183472 .

3. RMD Strategies to Help Ease Your Tax Burden. Charles Schwab , Jan. 2025, www.schwab.com/rmd-tax-strategy-planning-2025 .

4. Inherited IRAs: What to Know About Taxes, RMDs, and More. Morningstar , Mar. 2025, www.morningstar.com/inherited-iras-rmd-tax-implications-2025 .

5. RMD Strategies for Wealthy Retirees: 2025 Tax Planning Guide. RCS Planning , Mar. 2025, www.rcsplanning.com/rmd-strategies-tax-planning-wealthy-retirees-2025 .

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…).