Chevron Employee Financial Situations

Below are real life examples of situations that Chevron employees have experienced. We will demonstrate how to navigate these situations to help improve your chances of a successful retirement. 

Watching interest rates:

Back in 2020, an employee was leaving Chevron in early 2020 and had already ordered their pension packet to take the lump sum at roughly $1.23M. 

We first explained how the pension works and confirmed the LS was the correct choice after running a financial plan. We then canceled the pension forms and elected to watch the rates month by month, ultimately waiting 4 months to commence and increase until the 2nd segment rate dropped about 65BPS, giving them about $63K more in lump sum benefits. 

Understanding NUA and ESOP:

On multiple occasions, we have educated clients on NUA that had no idea about it, even when they said they had an existing advisor.  In one case we started a new relationship by saving someone and their advisor from making a mistake of quickly rolling their 401K over to an IRA.  After retiring in the late summer, we prevented them from simply rolling over to an IRA because we discovered they had close to 2000 shares of ESOP and explained NUA.  The cost basis was roughly $35K with a value of roughly $300K.  That would generate close to $265K of NUA to potentially save 9% taxes in their case or just under $24K.  We elected to wait until the following year to exercise it due to an even lower tax bracket on the cost basis. 

Understanding SS Offset:

Make sure the pension calculation has your social security listed correctly especially if you have worked in the public sector.  If you have worked only for Chevron your whole career you likely have no issues.  However, if you worked in the public sector and then transitioned to Chevron, they likely have your social security overestimated which will reduce your pension calculation affecting both the annuity and the lump sum.  Examples of this in the past have allowed us to uncover a difference of $50-$200/mo and over $17K in lump sum benefits.

**Based on a real client situation. Names and circumstances have been changed. This information is not intended as a recommendation. Investment decisions should always be made based on an investor's specific circumstances.