Whether in their working years or in retirement, individuals in the United States should aim to keep pace with changes and updates made by the IRS. For employees of ConocoPhillips, some of those changes for 2026 include the following:
- Standard deduction. Under the One Big Beautiful Bill Act (signed July 4, 2025), the standard deduction was made permanent and further increased for 2026: $16,100 for single filers and married filing separately, $32,200 for married filing jointly, and $24,150 for heads of household.
- Additional deduction. Taxpayers who are over the age of 65 or blind can add an additional $1,650 to their standard deduction. This amount jumps to $2,000 if they file singly or as head of household. A married couple filing jointly can claim a total of $3,200 in additional deductions.
- Cash contributions to charity. The special $300/$600 deduction for non-itemizer cash charitable contributions expired after 2021. However, the One Big Beautiful Bill Act created a new above-the-line charitable deduction for non-itemizers starting in 2026: up to $1,000 for single filers and $2,000 for married couples filing jointly.
Other notable changes for tax year 2026 include the following:
- Alternative minimum tax exemption amounts: The exemption amount for unmarried individuals increases to $88,100 ($68,650 for married individuals filing separately) and begin to phase out at $500,000 for unmarried individuals and $1,000,000 for joint filers. Under the One Big Beautiful Bill Act (§70107), the phase-out rate is 50% (up from 25%), and these thresholds are not indexed for inflation in 2026.
- Qualified transportation fringe benefit: The monthly limit for the qualified transportation fringe benefit and qualified parking is $340 per month for 2026, up from $325 in 2025.
- Health flexible spending cafeteria plans: For taxable years beginning in 2026, the dollar limit for employee salary reductions for contributions to health flexible spending arrangements rises to $3,400, increasing from $3,300 in 2025. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount rises to $680, up from $660 in 2025.
- Medical savings accounts: Participants with self-only coverage must use a plan with an annual deductible between $2,900 and $4,400 (vs. $2,850 to $4,300 in 2025). The maximum out-of-pocket expense rises to $5,850, up from $5,700 in 2025. For family coverage, the annual deductible is not less than $5,850 and not more than $8,750 (vs. $5,700 to $8,550 in 2025), while the out-of-pocket expense limit rises to $10,700 (vs. $10,500 in 2025).
- Foreign earned income exclusion: The foreign earned income exclusion is $132,900 for 2026, up from $130,000 in 2025.
- Estate tax credits: Estates of decedents who die during 2026 have a basic exclusion amount of $15,000,000, up from $13,990,000 in 2025. The One Big Beautiful Bill Act §70106 set the $15M figure for 2026 and made the higher exclusion permanent, with inflation adjustments resuming in 2027.
- Annual exclusion for gifts: The annual gift tax exclusion is $19,000 for 2026, unchanged from 2025.
- Adoption credits: The maximum credit allowed for the adoption of an eligible child rises to $17,670 for 2026, up from $17,280 in 2025.
Avoiding Double Taxation for ConocoPhillips Remote Employees
Remote workers employed by ConocoPhillips might face double taxation on state taxes. Here's what you need to know.
Thanks to the advent of remote work during and after the COVID-19 pandemic, many employees moved away from core cities. Notably, these moves could have taken them outside the state where they were employed. Some states established temporary relief provisions to help avoid the double taxation of income, but many of those provisions may have expired. There are only six states that currently have a "special convenience of employer" rule: Connecticut, Delaware, Nebraska, New Jersey, New York, and Pennsylvania. If you work remotely for ConocoPhillips, and you don't currently reside in those states, consult with your tax advisor to determine if there are other ways to mitigate the potential for double taxation.
Child Tax Credit Updates for 2026
Many of our clients interested in reducing their tax burdens are excited to learn about the Child Tax Credit. Although it only applies to individuals with children under the age of 18, it can be relevant to those who are approaching retirement if they have minor children—or if their children have children!
Here are the 2026 updates:
- Maximum credit per qualifying child: $2,200 per qualifying child under the age of 17.
- Child Tax Credit eligibility. As a parent or guardian, you are eligible for the Child Tax Credit if your adjusted gross income is less than $200,000, or $400,000 married filing jointly.
- Partial refundability. If your Child Tax Credit is greater than your tax, you can receive up to $1,700 as a cash refund.
How ConocoPhillips employees can optimize their retirement contributions
Contributing to your company's 401k plan can help cut this year's tax bill significantly.
With the right planning, these benefits can be compounded over time. In 2026, the amount you can save increased:
- 2026 limit. Individuals can contribute $24,500 to their 401k plans in 2026.
- Catch-up contributions. Employees age 50 and over can contribute an extra $8,000, bringing their total limit to $32,500. For those turning 60 - 63 years of age during calendar year 2026, their catch-up provision is $11,250, for a combined total of $35,750.
- A major opportunity. Lowering your taxable income by up to $35,750 means less of your money is immediately taxed. As shown in the table below, this could save thousands on your current tax bill.
Many investors choose to invest the money they save in taxes for the year. This bonus nest egg then has the opportunity to grow in the market, which can help pay the deferred tax when they make withdrawals from their accounts later in life.
The One Big Beautiful Bill Act also created a new $6,000 above-the-line deduction for taxpayers age 65 and older (available 2025 through 2028), which reduces taxable income and may lower the portion of Social Security benefits subject to federal income tax for many retirees.
Dealing with Inflation
Inflation—we're all too familiar with it. Inflation degrades purchasing power over time, meaning the same things cost more year after year. While inflation is difficult to deal with as a working adult, managing it becomes even more critical in retirement.
To maintain the same standard of living in retirement, you need to factor rising costs into your plan. While the Federal Reserve targets 2% inflation each year, the scorching inflation of the early 2020s reminded us that Fed targets are anything but a guarantee.
When nearing retirement, it's important to keep track of the rate of inflation, especially in specific areas like health care. While prices as a whole have risen dramatically, increases in some categories can outpace inflation, which can lead to unpleasant surprises down the road if you're not prepared. Speak with a qualified financial advisor when constructing your holistic plan to help plan for the impacts of future inflation.
*Source: IRS.gov, Yahoo, Bankrate, Forbes
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Source: Is it Worth the Money to Hire a Financial Advisor?, The Balance 2021
Why start investing early?
Starting to save as early as possible matters. Time on your side means compounding can have significant impacts on your future savings. Once you’ve started, continuing to increase and maximize your contributions for your retirement plan is key.
Waiting to invest in your retirement accounts can cost you. This hypothetical illustration shows the potential risks of waiting just 10 years to start investing in an IRA.
Assuming a $100 monthly investment and an annual return of 8%, an investor who starts at age 25 instead of age 35 would have an extra $200,000 in their account when they reach age 65. This example underscores the importance of starting early, but it also illustrates the importance of repeated, continuous investment. $100 a month might not seem like a lot to start, but by sticking with it, both of the investors in our example amassed a valuable nest egg that can help support them in retirement.
Of course, the amount you invest towards your retirement depends on your unique financial situation and goals. As a rule of thumb, consider investing roughly 10% of your salary toward retirement through your 30s and 40s. As long as your individual circumstances allow, it should also be a goal to maximize your contribution.
Move to Fidelity: Your Investing Options Don't Change
Overview
As the blackout period has ended, you now have access to your plan information via Fidelity NetBenefits®.
Title I: Phillips Retirement Income Plan (PRIP)
This pension plan impacts most heritage Phillips employees and is a defined benefit pension plan, calculated using your final average earnings with the company, your total service, and a Social Security offset.
By the plan's definition, the normal retirement age is 65. However, it is possible to receive an unreduced benefit as early as age 60. Although there is no early retirement reduction, there is an actuarial reduction. As with all the pension plans, the PRIP may be taken as a lump sum, a single life annuity, or a joint survivor annuity with various survivorship options. We'll go over these options in greater detail later.
The PRIP cannot be commenced until age 55. You may also encounter age penalties, which are about 5% per year prior to age 60, if you work until at least 55. These penalties can be even more costly if you leave the company prior to age 55.
If you are considering a lump sum payment from this pension plan, it is very important to pay attention to interest rates as you approach retirement. Interest rates on this plan change quarterly and have a negative correlation with the lump sum payout. Explained another way, rising interest rates will typically reduce the value of your lump sum. The interest rates that are used in this calculation are the Corporate Bond Segment Rates as well as the GATT rate (30-year Treasury), which impact different segments of your career. ConocoPhillips will use the average interest rates of the fourth month prior to the quarter you commence your benefit, which can be helpful in timing the election of your benefit to help maximize the lump sum payout.
How to Calculate Your Monthly Benefit under the PRIP
Final Average Earnings (FAE) = The monthly average of your highest three consecutive years of annual earnings out of the last 11 calendar years.
Credited Service (CS) = The number of months you have been participating in the Title I plan. Limited to 576 credits in Final Average Earnings Subtotal; limited to 400 credits in Social Security Offset.
Primary Social Security (PSS) = The estimated monthly Social Security benefit that you would receive at your normal retirement age.
Alternative Formula under the PRIP
As an alternative to the Final Average Earnings Monthly Benefit, you may receive the Minimum Retirement Income Benefit. This benefit is calculated using the following formula:
Credited Service (CS) = The number of months you have been participating in the Title I plan. Limited to 576 credits.
$15 x CS = Annual Minimum Retirement Income Benefit.
Annual Minimum Retirement Income Benefit / 12 = Monthly Minimum Retirement Income Benefit.
Remember: Companies make mistakes!
- If the company over-projects your offset: Send in your Social Security statement to correct. This can lead to a larger annuity/lump sum benefit.
- If the company under-projects your offset: You get to keep the larger benefit.
- Be careful about sending in your statement without first consulting an advisor from The Retirement Group. It could have unanticipated implications on your retirement.
Title II: ConocoPhillips Cash Balance Plan (CBP)
This defined contribution pension plan was originally offered after the merger between Conoco Inc. and Phillips Petroleum Co. This is the pension plan offered to most new hires and was also offered after the merger to existing employees who wanted to switch over from their heritage pension plans. As with all the pension plans, the CBP may be taken as a lump sum, a single life annuity, or a joint survivor annuity with various survivorship options.
The CBP is credited monthly by ConocoPhillips with both interest credits and pay credits. The interest credits are based on 30-year Treasury rates and the pay credits are based on total age and service points as follows:
Age Points + Service Points = Number of points under...
- 44 points = 6% pay credit percentage
- 44 through 65 points = 7% pay credit percentage
- 66 or more points = 9% pay credit percentage
Unlike the defined benefit pension plans, the CBP lump sum does not fluctuate quarterly based on changing interest rates. In fact, it is actually a benefit to this plan when interest rates rise, as the plan will receive higher interest credits. The annuity options on this pension, however, may be affected by changing interest rates, so we recommend paying attention to them if you are considering one of the annuity options on this pension.
How to calculate Your Monthly Credits with the COP Cash Balance Plan
Eligible Monthly Pay = Annual earnings ÷ 12
Pay Credit % = See table above
Monthly Interest Credit Rate = 30-year U.S. Treasury rate from four months before quarter of retirement (no less than 0.99%)
COP Cash Balance Plan Changes
The COP Cash Balance Plan was closed 1/1/19 for new hires and moved to the 401k, making it like a Money Purchase Pension Plan within the 401k. If you were a participant, you could either keep the CB Plan or move to the new plan. The new plan keeps the same 6%, 7%, 9% contributions metrics. So total COP contributions now range from 12% - 18% (15% goal) for newer employees, and 15% - 21% (18% goal) for long-term employees. Credits are based on points by combining age and service.
- Under 44 = 6%
- 44 – 65 = 7%
- 66+ = 9%
The 401k still has the 6% match and the 0%-6% discretionary with the goal of 3% for a target of 9% total.
There are pros and cons to the Cash Balance Plan being moved to the 401k:
Pro: You now have full control of the funds for investment purposes and they are not tied to low treasury rates.
Con: If you are highly compensated or want to max your 401k, it reduces the amount based on the $57,000 total contributions cap. Previously, the Cash Balance Plan was under pension rules and not part of the cap.
Example: For someone who is making $150,000 and has more than 66 points, the 9% or $13,500 that used to go into the CB plan now goes into the 401k and reduces the amount they can contribute by that much. That same person would have a target of 18% or $27,000 going in from COP. Assuming they are over age 50, the max total is $63,500, leaving $36,500 or 24.33% eligible for contributions. If they made $200,000 it leaves $27,500 or 13.75% for contributions and costs them $18,000 in contributions that used to be in the CB Pension Plan. Hopefully they elected to remain in the plan and not move to the new plan!
If you have further questions about the Title II plan, please don't hesitate to reach out.
Title IV: Retirement Plan of Conoco (RPC)
This pension plan impacts most heritage Conoco employees and, like the PRIP, is a defined benefit pension plan, calculated using your Final Average Earnings with the company (High 3 Formula), your total service, and a Social Security Offset. The normal retirement age is 65, but qualifying employees become eligible once they are 50 years old with at least 10 years of service. As with all the pension plans, the CBP may be taken as a lump sum, a single life annuity, or a joint survivor annuity with various survivorship options.
Although age 50 is the earliest you may begin your pension benefit under the RPC, it is possible to receive a pension benefit without making it to the 50 plus 10 milestone. However, benefits are substantially reduced, as age penalties for a normal retirement are about 4% per year prior to age 60.
If you are considering taking a lump sum from this pension plan, it is very important to pay attention to interest rates as you approach retirement. Interest rates on this plan change quarterly and have a negative correlation with the lump sum payout (as in, rising interest rates will typically reduce the value of your lump sum). The interest rates that are used in this calculation are the Corporate Bond Segment Rates, the GATT rate (30-year Treasury), and the PBGC rate, all of which impact different segments of your career. ConocoPhillips will use the average interest rates of the fourth month prior to the quarter you commence your benefit, which can be helpful in timing the election of your benefit to optimize the lump sum payout.
How to Calculate Your Monthly Benefit Under the Retirement Plan of Conoco
There are three formula options for this plan, but usually the High 3 Formula yields the highest benefit.
High 3 Formula:
Annual average of highest compensation over three consecutive years (or 36 months) x Years of Creditable Service x (1.6%/12) = Three year average compensation calculation.
Primary Social Security Benefit x Years of Creditable Service x 1.5% = Social Security Offset.
3 Year Average Compensation calculation - Social Security Offset = Monthly Benefit under High 3 Formula.
High 10 Formula (only applies to employees who joined Title IV plan before 1971):
- Annual average of highest compensation over 10 consecutive years - $3,000 = Excess compensation
- Excess compensation x 1.5% = Excess benefit
- Excess benefit + $30 = Preliminary benefit
- Preliminary benefit x Years of Creditable Service = Annual Benefit under High 10 Formula
- Annual Benefit under High 10 Formula ÷ 12 = Monthly Benefit under High 10 Formula
Minimum Benefit Formula:
Years of Service x $12 = Initial Benefit
Initial Benefit - result of either High 3 or High 10 calculation (whichever is higher) over period in which employee was eligible but did not participate in Title IV plan = Monthly Benefit under Minimum Formula
Remember, companies make mistakes!
- If the company over-projects your offset: Send in your Social Security statement and correct the mistake. This can lead to a larger annuity/lump sum benefit.
- If the company under-projects your offset: You get to keep the larger benefit.
- Be careful about sending in your statement without first consulting a TRG advisor.
Where to Find Information About Your ConocoPhillips Pension Benefit
NetBenefits is a website that contains your complete personalized pension benefit information. Log on to NetBenefits at http://hr.conocophillips.com/contacts-resources/fidelity/.
Deciding to start your ConocoPhillips pension benefits is an important milestone that involves specific mandatory actions. The process requires you to be on top of every action step and deadline along the way. As you start your retirement process, be sure to pay close attention to the steps you have to take and the specific deadlines for each one.
This guide will help you stay on track throughout the process. To get started:
- Get familiar with a few key terms related to the retirement process.
- Review the overall process timeline.
- Learn all you can by using the resources available to you.
- Understand how your actions will impact the timing of your pension payment.
- Get started on your retirement process to-do list.
ConocoPhillips Retirement Timeline
60-90 days before you want your pension benefits to begin:
- Establish your employment end date with your supervisor and notify your HRBP.
- Request your pension paperwork and confirm what other benefits you are eligible for through Fidelity NetBenefits or call the Retirement Center at 833-637-4015.
- If you and/or your spouse are eligible for Medicare on your employment end date, contact the Benefits Center at 800-622-5501 to avoid a gap in medical coverage.
30-60 days before you want your pension benefits to begin:
- Elect your form of pension payment on Fidelity NetBenefits or call the Retirement Center at 833-637-4015.
- Return required retirement forms.
After your employment end date:
- If eligible, enroll in retiree medical and/or life insurance on My Benefits within 30 days or any COBRA coverage within 65 days. You may also call the Benefits Center at 800-622-5501.
- Receive your pension payment approximately four to six weeks after your benefit calculation has been finalized.
- Consider when you’d like to take a distribution from your ConocoPhillips Savings Plan. Contact Fidelity at 833-637-4015 or visit the site.
Your Pension Paperwork—Timing Is Everything
You may have the option to choose either a lump sum benefit payment or monthly annuity payments. No matter which form of payment you choose, you must request and submit specific paperwork to receive your money. Every step of the process must be completed by each deadline. Generally, your lump sum payment will be made four to six weeks after your benefit commencement date (BCD).
Important Information About Critical Dates in the Retirement Process:
- Request your pension paperwork about 60 to 90 days ahead of your BCD—but no later than the 15th of the month before your BCD.
- If you request your paperwork after the 15th of the month, your BCD will be delayed by a month. This date (the 15th of the month) is critical if you elect a lump sum pension payment, as the interest rate as of your BCD is used to calculate your benefit.
- If electing a monthly annuity, the Benefits Center must receive your completed pension paperwork on or before the fifth of the month before your BCD.
If the Benefits Center receives your pension paperwork on time, you can expect your first payment around your BCD. If the Benefits Center receives your paperwork later in the process, your payment will be delayed accordingly.
ConocoPhillips Pension Distribution Options Explained
- Immediate Straight Life Annuity: Provides a fixed monthly payment for your life. No monthly payments will be made after your death.
- Total Lump Sum Payment: A single cash payment of your vested balance. The cash payment can be rolled over to an IRA or to a qualified employer plan.
- Immediate Joint and Survivor Annuity: Provides fixed monthly payments for your life. On your death, 50%, 75%, or 100% (depending on the percentage you elect) of the original monthly payment will continue for the life of your joint annuitant. If you die, joint annuitant payments are payable only to the individual you name when you select this option. You may not change your joint annuitant after annuity payments begin. If you name your spouse as your joint annuitant, the annuity is payable only to that spouse—not to anyone else you may marry at a later date.
Pension Payment Options
Deciding how to take your pension is an important part of planning for your retirement from ConocoPhillips. Should you take the lump sum or annuity? When should you take it? What is best for you and your family? To find out more information read our "Lump Sum vs. Annuity" e-book.
You should routinely use the tools and resources found in The Retirement Group's e-book gallery, such as the Retirekit, to model your pension benefit in retirement and the pension payment options that will be available to you.
You can also contact a ConocoPhillips dedicated adivsor at The Retirement Group at (800)-900-5867. We will get you in front of an experienced advisor to help you start the retirement process and discuss your payment options.
Note: We recommend you read the COP Summary Plan Description. The Retirement Group is not affiliated with ConocoPhillips.
What's the Next Step?
Determine if you should take the ConocoPhillips Pension as a Lump Sum or Annuity.
Do you understand how and why interest rates affect your pension payment decision?
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Use the "Retirekit" to model cash flow, run interest rate scenarios, and explore which pension option might be the best fit for you during retirement.
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As you get closer to your retirement date, contact a ConocoPhillips-focused advisor at The Retirement Group and be sure to read the applicable SPD Summary to start your retirement process.
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ConocoPhillips will need you to provide documents that show proof of birth, marriage, divorce, Social Security number, etc., for you and your spouse/legally recognized partner.
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ConocoPhillips has an online Beneficiary Designation functionality that allows you to make updates to your beneficiary designations, if applicable to your pension program. Please read your SPD for more details.
Lump-Sum vs. Annuity: How to decide?
ConocoPhillips employees in your state who are eligible for a pension are often given the choice to either receive pension payments for life or take a lump sum dollar amount for the “equivalent” value of the pension. The idea for those who choose a lump sum is that you could then take the money, roll it over to an IRA, invest it, and generate your own cash flows that enable you to take systematic withdrawals following your retirement from ConocoPhillips.
On the plus side, a lump sum payment gives you complete flexibility over the funds, potentially allowing you to generate a greater retirement cash flow than you would receive with an annuity. 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 during your lifetime—and you may regret not having held onto the pension’s “income for life” guarantee.
For its part, a pension annuity provides you with a steady stream of income throughout your lifetime, as long as the pension plan itself remains solvent and doesn’t default. So whether you live 10, 20, or 30 (or more!) years after leaving ConocoPhillips, you don’t have to worry about the risk of outliving your money.
Ultimately, your decision will depend on what kind of return must be generated on a lump sum to replicate the payments of the annuity. After all, if a return of only 1% to 2% on your lump sum can create the same lifetime cash flow you'd see with an annuity, you're at less risk of outliving the lump sum after leaving ConocoPhillips, even if you withdraw from it for life. However, if the pension payments can only be matched by earning a much higher and possibly riskier rate of return, there is a greater risk those returns won’t manifest and you could run out of money.
Interest Rates and Life Expectancy
In many defined benefit plans, like the COP pension plan, current and future retirees are asked to choose between a lump sum payout or a monthly pension benefit. Sometimes these plans have billions of dollars worth of unfunded pension liabilities, and to get the liability off the books, the company offers only a lump sum.
Depending on your life expectancy, the initial lump sum is often less money than regular pension payments over a normal retirement timeframe. However, individuals who opt for the lump sum typically plan to invest the majority of the proceeds, as most of the funds aren't needed immediately after retirement.
Something else to keep in mind is that current interest rates, as well as your life expectancy at retirement, have an impact on annuity payout options of defined benefit pension plans. Lump sum payouts are typically higher in a low interest rate environment. Lump sums decrease in a rising interest rate environment.
Additionally, projected pension lump sum benefits for active employees will often decrease as an employee ages and their life expectancy decreases. This can potentially be a detriment of continuing to work, so it is important to run your pension numbers often and thoroughly understand the timing issues. Other factors, such as income requirements, need for survivor benefits, and tax liabilities, often dictate the decision to take the lump sum over the annuity option on the pension.
Interest Rates and your Pension Decision
Should you desire to take your pension as a lump sum, ConocoPhillips will use interest rates and your age to calculate your lump sum payment. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship (except for the Cash Balance Pension Lump Sum payouts). This means that a rising interest rate will result in a lower lump sum payment and vice versa.
On average, a 1% increase in interest rates results in roughly an 8%-12% decrease to your pension lump sum (varies by age). Conversely, a 1% decrease to interest rates results in roughly an 8%-12% increase in your lump sum pension value.
Given the current complex interest rate environment, we strongly suggest discussing your options with The Retirement Group. We monitor rates on a daily basis and keep you updated on the monthly changes. We can provide a complimentary Cash Flow Analysis to show you how various retirement dates may play out.
It is important to remember that the annuity may be a better fit no matter how attractive the lump sum may seem. Every situation is unique, and a Cash Flow Analysis will allow you to compare all pension options.
Getting help with your 401k
Over half of plan participants in the United States admit they don’t have the time, interest, or knowledge needed to manage their 401k portfolio. But the benefits of getting help go beyond convenience.
A Charles Schwab study found several positive outcomes common to those using independent professional advice. They include:
- Improved savings rates – 70% of participants who obtained 401k advice increased their contributions.
- Increased diversification – Participants who managed their own portfolios invested in an average of just under four asset classes, while participants in advice-based portfolios invested in a minimum of eight asset classes.
- Increased likelihood of staying the course – Getting advice increased the odds of participants staying true to their investment objectives, making them less reactive during volatile market conditions and more likely to remain in their original 401k investments during a downturn.
Don't try to do it alone. Get help with your company's 401k plan investments. Your nest egg will thank you.
ConocoPhillips 401k Plan Details
Here, we dive into the details of the ConocoPhillips 401k plan. We cover eligibility, contributions, company matching, vesting schedules, breaks in service, loans, and withdrawals.
ConocoPhillips 401k Plan Eligibility
You are eligible to participate in the plan if you are an active employee on the direct U.S. dollar payroll. Contact NetBenefits to enroll in the plan at any time following your date of hire.
Contributions to the Plan
The plan consists of your voluntary contributions and company matching, discretionary, and retirement contributions:
Company Matching and Discretionary Contributions
When you contribute 1% of eligible pay, you will receive a 6% company matching contribution. You must contribute at least 1% each pay period to receive the company match for each pay period.
ConocoPhillips may make an additional 0% – 6% discretionary contribution. The target for the discretionary contribution is 3%, for a 9% total company contribution (match + discretionary). The discretionary contribution of 0% – 6% is based on factors such as company performance and market conditions. It is reviewed twice a year for the January to June and July to December periods (each an award period) and is deposited as a lump sum into your account in the same investment options that you have selected for your voluntary contributions to the plan.
ConocoPhillips Company Retirement Contributions
Vesting
Vesting refers to your right to ownership in your account balance. You are always 100% vested in your voluntary contributions, company matching, and company discretionary contributions.
After three years of service with ConocoPhillips, or when you reach age 65 (or age 55 with at least five years of service), you are 100% vested in any company retirement contributions.
Break in Service
If you terminate your employment before you are vested in company retirement contributions and later return, you may have what is called a break in service. This occurs when you fail to return to employment within a 12-month period. If the number of break in service years between when you terminated employment and you are rehired is five years or greater, you may be required to restart the three-year vesting period for company retirement contributions.
Loans
You may be eligible to apply for a loan from the plan if:
- You are an active employee; and
- You have an account balance of $2,000 or more.
The maximum amount allowed by federal law is the lesser of:
- $50,000, minus the sum of all your highest outstanding loan balances during the one-year period ending on the valuation date before the date the loan is issued. For this purpose, all loans from all employer plans are aggregated; and
- 50% of your account balance (excluding company retirement contributions) in this plan, minus the sum of all your outstanding loan balances from all employer plans as determined on the valuation date immediately before the date upon which the loan proceeds are distributed.
Withdrawals
Net Unrealized Appreciation (NUA)
When you qualify for a distribution from your 401k plan, 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.
So how does Net Unrealized Appreciation actually work?
First, you must be eligible for a distribution from your qualified company-sponsored plan, which typically happens at retirement age. Generally, you would take a lump sum distribution from the plan, distributing all assets from the plan during a one-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 ordinary income tax rates but at long-term capital gains rates of 0%, 15%, or 20%, depending on your taxable income. The 3.8% Net Investment Income Tax under §1411 may also apply if your income is above $200,000 (single) or $250,000 (MFJ).
Example: Net Unrealized Appreciation (NUA) Tax Savings
As a ConocoPhillips employee in the United States, you may be interested in understanding NUA from a financial advisor. Reach out today to schedule a complimentary meeting.
IRA Withdrawal
Your retirement assets may be spread across several retirement accounts: IRAs, 401ks, taxable accounts, and others.
What is the most efficient way to take your retirement income after leaving ConocoPhillips?
This question relates to something called withdrawal sequencing, and it's a problem we're well-equipped to handle at The Retirement Group.
You may want to consider meeting your income needs in retirement by first drawing down taxable accounts rather than tax-deferred accounts. This may help your retirement assets with your company last longer as they continue to potentially grow tax deferred.
You will also need to plan to take the required minimum distributions (RMDs) from any company-sponsored retirement plans and traditional or rollover IRA accounts when you reach age 73. Under SECURE 2.0, this age is 73 for those born between 1951 and 1959, and 75 for those born in 1960 or later.
Two flexible distribution options for your IRA
When you need to draw on your IRA for income or to take your RMDs, you have a few choices. Regardless of what you choose, IRA distributions are subject to income taxes and may be subject to penalties and other conditions if you’re under 59½.
Option 1. Partial withdrawals: Withdraw any amount from your IRA at any time. If you’re 73 or over, you’ll have to take at least enough from one or more IRAs to meet your annual RMD.
Option 2. Systematic withdrawal plans: Structure regular, automatic withdrawals from your IRA by choosing the amount and frequency to meet your income needs after retiring from ConocoPhillips. If you’re under 59½, you may be subject to a 10% early withdrawal penalty (unless your withdrawal plan meets Code Section 72(t) rules).
Your tax advisor can help you understand distribution options, determine RMD requirements, calculate RMDs, and set up a systematic withdrawal plan.
ConocoPhillips Company Benefits Annual Enrollment
Annual enrollment for ConocoPhillips benefits usually occurs each fall.
Before it begins, enrollment materials and an upfront confirmation statement reflecting your benefit coverage will be mailed to the address on file. You’ll find enrollment instructions, information about your benefit options from your company, and contribution amounts. You will have the option to keep the benefit coverage shown on your upfront confirmation statement or select benefit options offered by ConocoPhillips that better support your needs. You may be able to choose to enroll in eBenefits and receive this information via email instead.
ConocoPhillips Short-Term & Long-Term Disability Coverage
- Short-Term: Depending on your plan, you may have access to short-term disability (STD) benefits through ConocoPhillips.
- Long-Term: Your plan's long-term disability (LTD) benefits are designed to provide you with income if you are absent from employment for six consecutive months or longer due to an eligible illness or injury.
ConocoPhillips Life Insurance Details
Your life insurance coverage, and any optional coverage you purchase for your spouse/domestic partner and/or children, ends on the date your employment with your company ends, unless your employment ends due to disability. If you die within 31 days of your termination date from your company, benefits are paid to your beneficiary for your basic life insurance, as well as any additional life insurance coverage you elected.
Note:
- You may have the option to convert your life insurance to an individual policy or elect portability on any optional 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 ConocoPhillips SPD for more details.
ConocoPhillips Beneficiary Designations
As part of your retirement and estate planning, it’s important to name someone to receive the proceeds of your benefit programs in the event of your death. That’s how ConocoPhillips will know to whom to send your final compensation and benefits. This can include life insurance payouts and any pension or savings balances you may have.
When you retire from ConocoPhillips, make sure to update your beneficiaries. Your company should have an Online Beneficiary Designation form for life events such as death, marriage, divorce, child birth, adoptions, etc.
If you are unsure about your company's benefits, schedule a call to speak with one of our retirement-focused advisors.
Next Steps:
- Watch for your annual enrollment information in the September/November time frame.
- Review your benefits information and use the tools and resources available on the ConocoPhillips Benefits Center website.
- Enroll in eBenefits.
Things to keep in mind:
- 47% of Americans cite health care as their greatest economic concern.
- Medical bills are the #1 cause of bankruptcy in the United States.
- For older Americans, health care costs represent the second largest expense, behind housing.
Using an HSA for retirement health care
Health care costs continue to rise. According to the Centers for Medicare & Medicaid Services, health care in 2025 accounted for over 17% of the United State's GDP—which amounted to $4.5 trillion.
This raises the question: How will you be paying for health care in retirement?
Health Savings Accounts (HSAs) are tax-advantaged accounts designed for individuals with high-deductible insurance plans. For 2026, the IRS defines high-deductible plans as those with a minimum deductible of $1,700 for individuals, or $3,400 for families.
HSAs are often celebrated for their utility in managing health care expenses in a tax-smart way, with three primary benefits:
- HSAs allow contributions to be made pre-tax.
- Investments within HSAs grow tax-free.
- Withdrawals are tax-free for qualified medical expenses.
Thanks to this triple tax advantage, HSAs can be a potent retirement savings vehicle, especially after you've maxed out the employer match to your ConocoPhillips 401k in the United States.
HSA Contribution Limits & Retirement Strategy
In 2026, individuals can contribute $4,400 to an HSA, and families can contribute $8,750. Those aged 55 and older can contribute an additional $1,000.
When it comes to its place in your retirement toolbelt, HSAs really shine after you reach your employer's maximum match in 401k contributions. While 401ks offer tax-deductible contributions and tax-deferred growth, their withdrawals are taxable. HSAs bypass the withdrawal tax for qualified medical expenses, which are a significant (and increasing!) portion of retirement costs.
However, after age 65, the HSA flexes its muscles even more. After this age, funds can be withdrawn for any purpose, and subject to only regular income tax if used for non-medical expenses. This flexibility offers the benefits of traditional retirement accounts, but with the added advantage of tax-free withdrawals for qualified medical costs.
Further, HSAs do not have required minimum distributions (RMDs) like 401ks and traditional IRAs, offering more control over tax planning in retirement. This makes HSAs particularly relevant for those who don't anticipate needing all of their funds right away in retirement—or who want to manage their taxable income, perhaps as a part of a deferred compensation strategy.
HSA Investment Strategy Insights: Initially, conservative investment within an HSA is prudent. Early on, it's important to focus on maintaining sufficient liquid funds to cover near-term deductible and out-of-pocket medical expenses. However, once you've established a solid financial cushion, treating an HSA like a retirement account by investing in a diversified mix of assets can help boost long-term opportunity—and flexibility.
What can an HSA cover?
In retirement, HSAs can cover a range of expenses:
- Medical expenses. You can use HSA funds tax-free for qualified medical expenses, which include most doctor visits, prescriptions, and dental or vision care.
- Medicare premiums. HSA funds can pay for Medicare Part B, Part D, and Medicare Advantage premiums.
- Long-term care. HSA funds can cover some amount of qualified long-term care insurance premiums or services.
- Non-medical expenses. After age 65, you can withdraw HSA funds for non-medical expenses without penalty, although these withdrawals will be taxed as regular income.
HSAs are a powerful retirement tool, with unique advantages that can augment your ConocoPhillips health care benefits. By making strategic contributions and considerate withdrawals, you can optimize your financial health in retirement, while also prioritizing your physical health.
Claiming Social Security is one thing—understanding how your claim works is something else entirely. Understanding Social Security is a difficult but crucial step towards your retirement paycheck. For many Americans, Social Security benefits are core to their retirement income strategy. However, when and why you claim them depends on your overall withdrawal strategy.
To help you make an informed decision, let's explore three main steps you should follow to solidify your Social Security strategy at ConocoPhillips:
Step 1. Decide when to claim your Social Security benefits.
Social Security benefits can be significant, but at the end of the day, they're just one part of your overall financial picture. When considering the timing of your claim, keep this general principle in mind: The later you begin receiving benefits, the larger those benefits will be.
The full monthly Social Security retirement benefit is based on applying at the full retirement age (FRA), which is age 67 for those born 1960 or later. For every year you wait after you reach the FRA, your benefit amount increases 8%. It reaches a maximum at age 70. If we do the math, we can determine that, if you start claiming at age 70, your monthly benefit will be 124% the full benefit.
However, you can also apply before you reach FRA, as early as age 62. You will receive a reduced benefit if you do so, but this option could make sense for those who want to start claiming their benefit earlier for longevity reasons.
Step 2. Understand the tax implications.
For all but the lowest income retirees, Social Security benefits are actually taxable. Only individuals with provisional income under $25,000, or $32,000 if married filing jointly, receive their benefits tax-free. Otherwise, up to 85% of your benefits will be treated as taxable income.
Furthermore, depending on where you live, your Social Security benefits may even be taxed at the state level. If you plan to move for retirement, the tax regime in the state you're moving to can be a relevant consideration.
Step 3. Start preparing today.
Even if your retirement is right around the corner, you can make decisions today that will impact you for years, or decades, to come. For instance, delaying your Social Security claiming date by even a year or two can snowball into a significant benefit. To bridge the gap between their retirement date and their claiming date, some people create a "slush fund" while they're working to take the place of the Social Security benefits they would receive from claiming at FRA. Whether these funds come from a 401k, IRA, or brokerage account, integrating a bit of extra padding in your planning can pay off in the long run.
Always remember, your Social Security benefit is just one part of your overall financial picture. And when you start to consider tax implications, withdrawal sequencing, and effective diversification (beyond just the asset class), the picture can start to get complicated. That's what we're here to help with. At The Retirement Group, we've been assisting ConocoPhillips employees to and through retirement for years. If you're interested in speaking with an experienced advisor who's been through the process before, reach out today.
ConocoPhillips Medicare Coverage for Retirees
Are you eligible for Medicare or will be soon? If you or your dependents are eligible after you leave ConocoPhillips, Medicare generally becomes the primary coverage for you or any of your dependents as soon as they are eligible for Medicare. This will affect your company-provided medical benefits.
It's your responsibility to enroll in Medicare Parts A and B when you first become eligible—and you must stay enrolled to have coverage for Medicare-eligible expenses. This applies to your Medicare-eligible dependents as well.
The Reality of Medical Costs in Retirement
Divorce and Retirement Benefits Explained
Social Security Benefits. Divorce can impact retirement benefits, including Social Security. Understanding how divorce affects Social Security is essential for retirement planning, especially if you were married for a long time. In some cases, divorced individuals may be eligible to claim benefits based on their former spouse's work record.
You can apply for a divorced spouse’s benefit if the following criteria are met:
- You’re at least 62 years of age.
- You were married for at least 10 years prior to the divorce.
- You are currently unmarried.
- Your ex-spouse is entitled to Social Security benefits.
- Your own Social Security benefit amount is less than your spousal benefit amount, which is equal to one-half of what your ex’s full benefit amount would be if claimed at full retirement age (FRA).
Unlike a married couple, your ex-spouse doesn’t have to have filed for Social Security before you can apply for your divorced spouse’s benefit. However, this only applies if you’ve been divorced for at least two years and your ex is at least 62 years of age. If the divorce was less than two years ago, your ex must already be receiving benefits before you can file as a divorced spouse.
Social Security Survivor Benefits
Many people are surprised that divorce doesn't disqualify you from receiving survivor benefits if your spouse dies. You can claim a divorced spouse's survivor benefit if the following conditions are met:
- Your ex-spouse is deceased.
- You are at least 60 years old.
- You were married for at least 10 years.
- You are single, or you remarried after age 60.
If you qualify for survivor benefits and your own Social Security benefits, you can choose to start with survivor benefits and switch to your own later, or vice versa, depending on which option gives you the highest payout over time. If this pertains to you, we recommend speaking to a qualified financial advisor—because planning your Social Security strategy in advance is critical to optimizing your outcomes.
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