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How Much of Your Savings Should You Invest in the ExxonMobil Savings Plan?

Let the experts at Cerity Partners help you decide how much of your savings should be invested in the EMSP.

Prospective clients from ExxonMobil will ask, “So, how much should I save inside the EMSP?”

The most straightforward answer, of course, is, “At least 6%, so you benefit from ExxonMobil’s very generous 7% match.”

But the question goes beyond the obvious. Spoiler alert: the answer depends on your circumstances.

1

The Case for Most or All

  • Saving between 6% and 20% of your salary in the EMSP will generate a lot of money over a twenty-five-to-thirty-five-year career if invested and managed wisely. Payroll deduction makes saving easy—it’s “pay yourself first.” Compounding returns and dollar-cost-averaging of your investments help the account grow.
  • The investment options inside the EMSP have very low expense ratios and cover a broad swath of investment opportunities for salaried individuals.
  • During your working career, the tax-deferred nature of appreciation within the EMSP and the tax deduction for before-tax contributions all help keep the long reach of the IRS away from your pockets.
  • Once you choose an appropriate allocation for your assets, you can almost put your savings on autopilot and pay attention to more demanding tasks, like your job or your family.
  • It’s hard to get money out of the EMSP, which helps participants avoid spending down savings targeted for retirement.
  • Low-cost ExxonMobil stock aligned with after-tax contributions and Net Unrealized Appreciation (NUA) tax treatment can provide bridge income before 59-1/2 or a good source for charitable giving.

2

The Case Against Most or All

  • Saving money in an outside brokerage or investment account offers flexibility not available with funds inside the EMSP. Investment options are broader, and access to funds is easier.
  • Upon retirement, you will likely roll over to an IRA most of what’s in your EMSP and your tax-qualified ExxonMobil Pension Plan benefit. That may make you “IRA-heavy” relative to the rest of your wealth. Uncle Sam may claim 25% to 35% of every distribution. You’ll also have to take Required Minimum Distributions (RMDs) at some point, whether you need them or not. Assets in an investment account aren’t subject to RMDs.
  • You pay taxes annually on dividends, interest, and capital gains in a taxable investment account, but you can access your invested capital income-tax-free since the investment consists of after-tax dollars.
  • Assets held in a brokerage account generally get a “step-up” in cost basis upon your death; 401(k) and IRA assets don’t get stepped up.
  • Depending upon your level of wealth, you can invest in alternative investments like private equity or private debt in a brokerage account. You can also use savings outside of the EMSP for real estate or collectibles.
  • Should you need funds before age 59-1/2, there’s no 10% penalty for accessing assets in an investment account.
  • You can use money invested in an investment account for college tuition, gifting, or buying that BMW you’ve lusted for over the years. You can’t do those things as easily with money inside the EMSP.

Sorry to disappoint you if you expected a precise answer to the question. In our practice, we say, “Prescription without diagnosis is malpractice.” While an adequate answer might be “some of both,” the correct decision for you depends on your situation and may change over time. A comprehensive look at your goals and assets and discussing strategies to achieve your objectives should help refine your thinking. Let’s talk!

Meet Doug Garrison

Doug is a Partner based in the Houston office and a member of the firm’s Wealth Management practice. He is responsible for delivering investment...Read more

Meet Doug
Doug Garrison

Cerity Partners is not contracted with, endorsed by or affiliated with Exxon Mobil Corp.

Please read important disclosures here.

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Your Introduction to a Trusted Financial Partner Awaits

Our Concierge Program offers a simple, personalized approach to finding your ideal financial advisor.

Schedule your complimentary 30-minute discovery call so we can understand your unique financial and life goals and match you with the advisor most well suited to help.

Dustin Ribergaard's headshot

Dustin Ribergaard

Lead Concierge

Call us to Schedule: (212) 202-1810

Find your ideal financial advisor with our personalized Concierge Program.

Call Us: (212) 202-1810

or

Schedule a complimentary discovery call now:

Book Time Online Now

Where are your liquid assets held?

Book your meeting

This 30-minute call with me is designed to better understand your unique financial and life goals and match you with the advisor most well suited to help.

Looking forward to
speaking with you!

Dustin Ribergaard

Lead Concierge

Dustin Ribergaard's headshot

Thank you for your interest

Thank you for your interest in our financial services. We appreciate the opportunity to connect and learn about your financial goals. A representative will be in touch to discuss your financial needs.

Questions? (212) 202-1810

Thank you for booking a meeting with us!

We look forward to connecting with you soon.

Here are some valuable insights to read before your meeting

blog image background

Shannon Jenkins

Partner

Business Owner Advisory

5 Ways Small Business Owners Can Help Protect Themselves from Tariffs 

May 14, 2025 - With headlines dominated by tariffs and trade policy shifts, small & mid-size business owners are on edge. Learn 5 ways to protect your small business…

blog image background

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Partner

Estate Planning

10 Ways to Protect the Wealth You Have Built 

May 2, 2025 - Regardless of wealth level, everyone's assets are at risk, and it is critical to put together a plan to safeguard them. Learn 10 ways to…

blog image background
Economic and Market Outlooks

Webinar Recording: Q2 2025 Market & Economic Outlook

May 16, 2025 - Watch our Investment Office’s timely assessment of recent market volatility and economic uncertainty. This quarter’s market update assesses the economic landscape before and after the…

  • General inquiries: click here
  • Institutions and non-profits: click here
  • Corporations: click here

Learn about our Privacy Policy

By clicking “Schedule Now”, you acknowledge that we collect your name, email address and phone number to respond to your inquiries and provide you information about our products and services in accordance with our Privacy Policy. If you are a California resident, please see our CCPA Notice to California Residents.