As a Chevron employee, you are provided with an Employee Savings Investment Plan (ESIP), which is a defined contribution plan that can make it easy to save for retirement. Because both yours and Chevron’s matching contributions are immediately vested, you can take your savings with you when you leave Chevron. We at Insight know that you will want to make the most of your benefits and when you work with one of our financial advisors, we can help make sure you do.
When you make contributions to your 401(k), you can choose between contributing to the Roth, pre-tax or after-tax sources. If you want to be eligible to receive the Chevron match you will need to contribute at least 2%.
If you decide to contribute to the Roth or pre-tax sources and are under 50 years old in 2021, you can contribute up to $19,500 between pre-tax or Roth. This means that if you contribute $10,000 to pre-tax, you would only be able to contribute $9,500 to Roth. An additional $6,500 can be contributed if you are over 50 years old, bringing the total contributions form pre-tax and Roth to $26,000 (in 2021). Our financial planning team has experience navigating these sometimes complicated Chevron benefits plans, so that you make sure you are getting the most out of what you have worked so hard to save.
Frequently Asked Questions
- Read our article on using Net Unrealized Appreciation with Chevron Stock.
- Generally, distributions taken from tax-deferred retirement accounts are subject to ordinary income tax, but utilizing NUA for the Chevron stock in your ESIP can enable you to take advantage of the capital gains rate, which is typically more favorable than the ordinary income tax rate. This strategy can save you a significant amount on your taxes over the long run.
- There are several factors that will come into play when you are choosing the best retirement date for you. Choosing to retire early in the year or late in the year can have different effects on your payout and will need to be considered. The IRS segment rates will play a part in determining the value of your Chevron retirement Plan (CRP), so you will want to be aware of these (see https://insight2wealth.com/segment-rate-newsletter/)
- The limitation for defined contribution plans under § 415(c)(1)(A) is increased for 2021 from $57,000 to $58,000.
Insight Wealth Strategies, LLC is not affiliated with Chevron.