Understanding ExxonMobil’s Retirement Plan Benefits for Employees
With a combination of a Savings Plan 401(k) and a Pension Plan, employees benefit from robust options to save, grow, and enjoy their retirement. Below, we’ll explore the key features and benefits of ExxonMobil’s retirement plans.
*We are an independent financial planning firm and are not affiliated with BP, Chevron, CITGO, ConocoPhillips, ExxonMobil, Halliburton, Shell, or Schlumberger. We help former employees of these companies with retirement planning and investment strategies.
ExxonMobil Savings Plan 401(k)
The ExxonMobil Savings Plan 401(k) is a robust retirement platform offering extensive options for savings, investment, and advanced tax strategies. Whether you’re early in your ExxonMobil career or approaching retirement, understanding these features can significantly enhance your wealth-building potential.
Contributions
Employees can contribute up to 20% of their pay on a pre-tax, after-tax, or Roth basis, giving flexibility to choose a savings method based on individual tax needs. Whether you’re looking to reduce taxable income today or plan for potentially tax-free withdrawals in retirement with Roth contributions, this plan has you covered.
For 2026, the IRS maximum is $24,500 ($32,500 for those age 50 or older)
Company Match
ExxonMobil matches 7% of pay when you contribute at least 6%. The company match is an excellent benefit, offering employees the chance to significantly enhance their savings over time. The match vesting occurs after three years of service, ensuring long-term commitment pays off.
Investment Options
Employees can diversify their investments with a choice of seven investment options, catering to varying risk preferences and financial goals. Whether you prefer conservative or aggressive investment strategies, the Savings Plan allows you to align your portfolio with your retirement vision.
Roth Contributions and After-Tax Conversions
After hitting the IRS limit for pre-tax and Roth contributions, you can allocate additional funds into the plan via after-tax contributions up to the total employer/employee annual limit, which is $72,000 for 2026.
Optimizing Savings with Mega Backdoor Roth Conversion
One of the most powerful planning opportunities for ExxonMobil employees is the Mega Backdoor Roth strategy:
Step 1 - After-Tax Contributions ls
The first step is contributing the maximum allowable amount to your 401(k). This includes your typical employee deferrals (up to $32,500 in 2026, including catch-up contributions) and any employer matching contributions.
Once you hit these limits, you can make additional after-tax contributions to your 401(k), as long as your total contributions (employee, employer match, and after-tax) do not exceed the Section 415 limit of $80,000 (2026).
Step 2 - Conversion to Roth
After making your after-tax contributions, you need to convert them to a Roth account. There are two ways to do this based on your 401(k) plan’s options:
In-Plan Roth Rollover
If your 401(k) plan supports it, you can directly convert your after-tax contributions into a Roth 401(k) within the same plan.
Roth IRA Conversion
Alternatively, you can roll over your after-tax contributions into a Roth IRA. This option is particularly attractive because Roth IRAs have fewer withdrawal restrictions than Roth 401(k)s.
Tip: Earnings on after-tax contributions are treated as pre-tax: While your after-tax contributions themselves have already been taxed, any earnings they generate within the employer plan are considered pre-tax money. The best practice is to convert after-tax contributions to a Roth account (either Roth 401(k) or Roth IRA) as soon as possible, ideally before substantial earnings accumulate. This minimizes taxable income triggered by the conversion and maximizes the amount growing tax-free in the Roth account moving forward.
example scenario
- Salary: $250,000
- Maxes out pre-tax: $22,500
- Receives 9% company match: ~$31,000
- Remaining room: $24,000 for after-tax contributions
- Converts immediately to Roth = $24,000 tax-free growth potential
Strategy Highlight: Net Unrealized Appreciation
The Net Unrealized Appreciation (NUA) strategy is another unique opportunity for ExxonMobil employees who own company stock in their Savings Plan:
How It Works: When rolling over your 401(k) after leaving or retiring, you can transfer ExxonMobil stock in-kind to a taxable brokerage account. You’ll pay ordinary income tax only on the original cost basis of the shares, not the entire market value.
Tax Advantage: The growth (NUA) above the original cost is taxed at the long-term capital gains rate—typically lower than ordinary income tax rates. This can mean significant tax savings, especially for stock with a low cost basis.
Key Considerations: NUA works best with highly appreciated ExxonMobil stock and should be considered within the context of your entire tax situation and retirement timeline. The transaction comes with its own complexities, so careful planning with a tax or financial advisor is highly recommended
Comparing NUA vs. Non-NUA Tax Savings
Example:
A couple is preparing for retirement after decades of careful savings and planning. The husband spent his career in the Oil and Gas Industry, while the wife worked in education. Together, they have built a substantial nest egg and are now considering their best options for handling the husband’s company stock as they transition into retirement.
Their Retirement Snapshot
- Total 401(k) Plan Value: $1,000,000
- Company Stock Value: $400,000
- Cost Basis of Stock: $100,000
- Other Retirement Assets: $600,000 (in mutual funds, target date funds, etc.)
They are weighing two strategies for the company stock portion of their retirement plan to maximize their after-tax savings.
Their Tax Situation
- While working, their household income places them in the 24% tax bracket.
- After the husband retires, their income will drop, and they expect to be in the 22% tax bracket for IRA withdrawals.
- Their current long-term capital gains tax rate is 15%.
Important Tax Reminders
- Tax Complexity: The Savings Plan offers a tremendous amount of flexibility, which also means more complex tax consequences for conversions, rollovers, and distributions. Each decision may impact your taxes now and in the future.
- Seek Professional Advice: Before implementing advanced strategies like mega backdoor Roth conversions or NUA, consult with a qualified tax advisor or financial planner to ensure optimal results for your unique situation
NUAs are better with low cost basis stocks vs high cost basis.
ExxonMobil Pension Plan
The ExxonMobil Pension Plan adds another powerful tool for retirement, designed to provide employees with guaranteed lifetime income during their post-career years.
Lifetime Monthly Benefit
Employees who participate in the Pension Plan receive a lifetime monthly retirement benefit. This consistent payment serves as a financial safety net, reducing reliance on market-driven income sources.
Vesting and Eligibility
Pension benefits vest after five years of service, ensuring employees earn value over time. To qualify as a retiree and access benefits, employees must have at least 15 years of service and leave the company after turning age 55.
Disclosures: Saxon Financial Group is not affiliated with or endorsed by ExxonMobil. Corporate benefits may change at any time. Be sure to consult with human resources and review your plan summary before making a decision.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. This information is provided for educational purposes only and does not constitute tax advice.
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