6 Financial Planning Strategies Using Your Chevron Benefits

1. Understand the various savings options available to you.

It’s helpful to understand the differences and benefits of these options, so you can take full advantage of these opportunities, regardless of your age.

As a Chevron employee, your saving options include:

• Chevron’s 401(k) plan — The Employee Savings Investment Plan (ESIP)
• The Chevron Employee Savings Investment Restoration Plan (ESIP RP)
• Qualified Pension — The Chevron Retirement Plan (CRP)
• Non-Qualified Pension for those PSG 26 and above — The Chevron Retirement Restoration Plan (RRP)
• Chevron Deferred Compensation Plan (DCP) — For those PSG 28 or above
• Varying incentive plans, including:
  • Chevron Incentive Plan (CIP) — We’ll help you maximize your annual performance bonus through tax planning, savings prioritization, and benefit eligibility assessment.
  • LTIP Stock Options
  • Stock Options (ISO) and Non-Qualified Stock Options (NQSO)
  • LTIP Performance Shares
  • LTIP Restricted Stock Units

2. Save more by maxing out your 401(k) contributions.

• Chevron will contribute to your ESIP by matching your contributions up to 8 percent of your salary annually. To receive the Chevron match, you must contribute at least 2 percent to the basic source in the ESIP. 
• If you’re under 50, you can contribute up to $22,500 (2023) between pre-tax or Roth contributions.
• If you’re over 50, you’re allowed to contribute an additional catch-up amount of $7,500, for a total contribution option of $30,000 (2023).

If you're not getting over $73,500 into retirement savings, you're missing out. Learn more here.

3. Choose your contributions wisely.

You have the option of making pre-tax, after-tax, or Roth contributions to your 401(k). Each of these contributions has its benefits, and the best choice for you will depend on your personal goals and financial plans. Learn more about these options, as well as these other savings strategies:

• Annually convert after-tax money from your 401(k) to a Roth IRA for tax-free contributions and growth. This is an especially efficient option if you have surpassed the income limit to contribute directly to a Roth IRA. 
• Coordinate annual backdoor Roth contributions in addition to your workplace savings. This can add up to $6,500 to your Roth IRA every year, depending on your age.
• Max out your ESIP contributions before earning $330,000 of income.
• If you’re expecting to retire at the beginning or middle of the year, strategically contribute higher percentages of your salary and bonuses in the first quarter to maximize your contributions and  Chevron’s employer contributions.

4. Use tax planning to time your financial decisions.

It’s imperative to time major financial decisions in accordance with a strategic tax plan. There are many Chevron benefits and other retirement-related considerations that can either save or cost you substantial amounts based on their timing.

For many Chevron employees, these include:

• Rebalancing your ESIP 
• Understanding the after-tax value of your ESIP RP
• Retirement income benefits through the CRP, understanding the differences between lump sum and annuity payouts, and the RRP 
• Making elections through the DCP
• Withdrawing Net Unrealized Appreciation (NUA) from Chevron stock
• Comprehensive tax strategy
• Charitable giving and deductions through the Chevron HumanKind Matching Program
• Setting up a consulting practice
• Bonus and vacation payout

5. Know your pension/retirement date calculation.

The date you choose to retire can significantly affect the total pension funds available to you, your tax impact and your bonus payout. For example, sometimes, retiring 15 days later can have a significant impact on your Chevron pension lump sum payout. Consider the various scenarios related to your age, retirement month, and interest rate trends, so you can select the most beneficial timetable.

6. Start saving as early as possible.

It’s important to start saving in the ESIP and incentive plans as early as possible, so you can use time and market returns to your advantage. When you consider the value of compounded growth of these accounts and the potential that even just a few years can add to the bottom line, it’s never too early to begin putting together your retirement strategy and preparing for the future.