By Scott Hamilton
ExxonMobil is one of the largest oil and gas companies in the world, with over 70,000 employees across the globe. The company offers a comprehensive benefits package to its employees, including health insurance, retirement plans, and various other perks. At Hamilton Financial Planning, we work largely with clients in the oil and gas industry and we have helped many ExxonMobil employees navigate their compensation packages. Here are our top 6 tips for making the most of your benefits.
Table of Contents
Maximize Your Contributions to the ExxonMobil Savings Plan
The ExxonMobil Savings Plan is a 401(k) that allows employees to save up to 20% of their salary on a pre-tax basis. Contributing to this plan is a great way to take advantage of your ExxonMobil benefits. The plan offers a range of investment options and tax benefits, including pre-tax and Roth after-tax contributions.
To maximize your contributions, it’s recommended that you contribute as much as you can afford, up to the IRS maximum contribution limit. For 2023, that limit is $22,500 for individuals under age 50, and $30,000 for individuals age 50 and older.
Contributing the maximum amount not only helps you save more for retirement, but also helps you reduce your taxable income. Additionally, consider reviewing and adjusting your contributions periodically to keep yourself on track to meet your retirement goals.
Take Advantage of the Employer-Matching Contributions
If you can’t afford to maximize your Savings Plan contribution, you should contribute at least enough to take full advantage of the ExxonMobil employer match. The company offers a generous 7% match for every dollar contributed by employees, up to the IRS maximum contribution limit. This means that if you earn $100,000 and contribute 7% of your salary to the plan, ExxonMobil will match your contribution dollar for dollar. That’s an extra $7,000 you didn’t have to contribute yourself—it’s essentially free money!
To maximize your savings, it’s recommended that you contribute at least enough to take advantage of the full employer match. You can also consider increasing your contribution percentage over time to reach the maximum contribution limit.
Consider Contributing to a Roth IRA
Contributing to a Roth IRA can also be an effective way to make the most of your compensation package as an ExxonMobil employee. A Roth IRA is a retirement savings account that allows you to make after-tax contributions, and your contributions and earnings grow tax-free. This means you won’t have to pay taxes on the money when you make withdrawals in retirement.
While the ExxonMobil Savings Plan offers tax-deferred and after-tax contribution options, a Roth IRA can provide additional tax benefits and diversification in your retirement portfolio. You can contribute up to $6,500 per year to a Roth IRA, or $7,500 per year if you are age 50 or older.
Contributing to a Roth IRA can provide flexibility in retirement, as you can withdraw your contributions at any time without penalty after age 59½ and you are not subject to required minimum distributions. Additionally, you can continue to contribute to a Roth IRA even after you retire, as long as you have earned income. If you have maxed out your employer-sponsored retirement plan and you still want to save for retirement, a Roth IRA is a great tool to consider.
Maximize Your Contributions to Your ExxonMobil HSA
A lesser known, but equally important, benefit offered by ExxonMobil is access to a Health Savings Account (HSA). This is a tax-advantaged savings account you can use to pay for eligible medical expenses, both now and in retirement.
HSAs are available for employees enrolled in a high-deductible health plan. If you qualify, consider maximizing your contributions. In 2023, you can contribute up to $3,850 for individuals or $7,750 for families. Those over the age of 55 can make additional catch-up contributions of $1,000 per year.
Maximizing your HSA contributions not only helps you save for current and future medical expenses, but it also reduces your taxable income. When money is withdrawn to pay for medical expenses, it is received income-tax-free. After reaching age 65, HSA funds can be used for any purpose without penalty, though non-medical expense withdrawals will be taxed as ordinary income. Additionally, any unused funds in your HSA roll over from year to year, and the account is portable, meaning you can take it with you if you leave ExxonMobil.
Utilize Your FSA Funds
An FSA is a tax-advantaged savings account you can use to pay for eligible healthcare expenses, such as deductibles, co-pays, and prescriptions.
FSAs have a contribution limit of $3,050 in 2023. It’s important to plan your expenses carefully and use all your FSA funds before the end of the plan year. This is because, unlike an HSA, FSA funds do not roll over to the next year in their entirety. Instead, only $610 can be rolled over.
To maximize your FSA benefits, consider estimating your healthcare expenses for the year and contributing the appropriate amount to your account. Additionally, keep track of your expenses throughout the year and submit reimbursement claims promptly to avoid losing any funds.
Participate in the ExxonMobil Supplemental Savings Plan
Participating in the ExxonMobil Supplemental Savings Plan is another important way to maximize your compensation package as an ExxonMobil employee. The Supplemental Savings Plan is a voluntary, tax-deferred savings plan that allows you to contribute a portion of your base salary and/or bonus to a variety of investment options. This is a non-qualified plan meant for highly compensated employees at ExxonMobil. As with other tax-deferred savings accounts, withdrawals in retirement will be subject to income tax on both contributions and earnings.
Are You Making the Most of Your ExxonMobil Benefits?
As an ExxonMobil employee, you have access to a robust benefits package that can help make planning for the future a little bit easier. Let Hamilton Financial Planning help you navigate your benefits package to prevent you from leaving money or benefits on the table. After all, you earned your compensation and should take full advantage of what’s available. Schedule a complimentary get-acquainted meeting online or reach out to us at 512-261-0808 or scott@hamiltonfinancialplanning.com.
About Scott
Scott Hamilton is founder and chief financial officer at Hamilton Financial Planning, a wealth management firm that specializes in providing comprehensive financial planning for retirees. With over 20 years of experience in the financial industry, and having completed over 250 financial plans for retirees across all industries, but mostly the oil and gas industry, Scott is passionate about providing his clients with the tools and insight they need to achieve their financial goals. He has a Bachelor of Business Administration in finance from Texas State University and an MBA in international finance from Pepperdine University. Scott has also been happily married to his wife, Gayle, for over 25 years. To learn more about Scott, connect with him on LinkedIn.
