Retirement Timing and Income Planning Reference

The right retirement date depends on how Chevron plan provisions, pension timing, and other income fit your needs. Chevron employee retirement planning starts by identifying the rules that apply to your employment history, then comparing when and how benefits may be paid before making elections.

For employees and retirees in San Ramon and the East Bay, retirement decisions involve more than choosing a pension start date. Incentive compensation, company stock, savings-plan contributions, rollovers, and taxes can all affect your income picture. Assess each decision against expected income and spending, while considering how much flexibility you may want later.

The structure, stated plainly: investment advisory services at Cadence Capital Investments are offered through Prosperity Financial, a Registered Investment Advisor, which acts in a fiduciary capacity for those advisory services. Securities are offered through Fortune Financial Services, LLC, a Registered Broker/Dealer and member FINRA and SIPC. Insurance and annuity products are offered through licensed affiliates, so the firm is fee-based rather than fee-only: an affiliate may earn commissions on certain products, disclosed before any recommendation. Cadence Capital Investments is not affiliated with, endorsed by, or sponsored by Chevron Corporation.

Chevron employees: when is the right time to retire?

The right retirement date depends on which Chevron Retirement Plan provisions apply, how your pension is calculated, and when other income begins. Compare these details with your spending needs and healthcare coverage before choosing a benefit start date.

Pension eligibility and payment information

A pension is a retirement benefit paid according to a plan's eligibility, calculation, and payment terms. Identify which Chevron Retirement Plan provisions apply to your employment and eligibility history, then review the current summary plan description and your personal benefit statement.

The pension calculation draws on earnings and years of service, and the formula that applies can depend on when you were hired or became eligible. For some participants it includes a Social Security offset based on a projected benefit. Check the earnings, service, and Social Security figures on your benefit statement against your own records, since an incorrect input can change the result. Your statement, not a general description, shows how the formula applies to you.

The Chevron Retirement Restoration Plan is a non-qualified plan that supplements the Chevron Retirement Plan. Review its payment terms separately from qualified pension benefits. Retiree medical and Medicare-related benefits depend on the terms that apply to you, so review the retiree materials to understand coverage options and how they coordinate with Medicare.

Use the plan documents and benefit materials provided through Chevron's designated benefits resources to locate official documents and administrator contact details. The summary plan description explains plan provisions; the benefit statement provides your individual estimate. Review both.

Benefit factors and plan comparisons

Age, years of service, and hire or eligibility date can affect which provisions apply and how benefits accrue. Check these details against your employment records before comparing retirement dates.

Comparing Chevron's plan with those of other energy companies requires current plan terms for each: eligibility provisions, earnings definitions, service calculations, Social Security offsets, payment forms, and healthcare coverage. Similar industries don't mean similar rules.

For a practical comparison, make a worksheet with one row for each retirement date you're considering. Record the projected pension, payment form, other income expected to begin, and healthcare coverage described in the plan materials. Include your spouse or other household decision-makers, especially when a payment election affects survivor income. Plan choices can shape your income for years, so compare written estimates with plan provisions before making an election.

Deferred compensation and incentive plans

Treat deferred compensation as a separate income source from pension benefits and savings-plan assets. Deferred compensation is pay set aside for later rather than received as current salary. Each arrangement has its own eligibility and distribution terms.

The Employee Savings Investment Restoration Plan (ESIP RP) supplements the Chevron Employee Savings Investment Plan (ESIP) for eligible employees whose pay exceeds IRS limits on qualified plans. Review its eligibility, balance, distribution choices, and payment timing separately from the ESIP. Similar names don't mean the same rules.

Chevron Deferred Compensation Plans (DCP) allow eligible employees to defer compensation under plan terms. Review the election provisions alongside the distribution schedule: one explains how pay is deferred, the other when it may be received. Non-qualified deferred compensation is generally an unsecured promise from the employer, which is worth weighing when deciding how much to defer.

Chevron's Long-Term Incentive Plans can include performance shares, stock options, and restricted stock units. Performance shares are tied to performance conditions; stock options provide the right to buy shares under plan terms; restricted stock units represent a promise of shares subject to applicable conditions.

Before setting a retirement date, list each award, its status, applicable conditions, and expected distribution or exercise period, using the award notice and plan documents. An unvested award may be treated differently from shares already distributed. Don't assume all awards follow one schedule or remain payable after employment ends.

Company shares also create concentrated exposure to Chevron stock. Consider that exposure alongside your other savings rather than judging each award in isolation. Tax treatment depends on the specific award and transaction; consult a CPA.

Net Unrealized Appreciation (NUA) for company stock

Net unrealized appreciation is the increase in value of employer stock held inside a workplace retirement plan. For Chevron employees with company shares in the ESIP, it may allow those shares and the rest of the plan to follow different tax paths, rather than moving everything into an IRA.

How it works. With an eligible NUA distribution, the shares are transferred in kind to a taxable brokerage account. The plan's cost basis is generally taxed as ordinary income in the distribution year. The appreciation is taxed at long-term capital gains rates when the shares are sold, regardless of how long you hold them after the distribution.

What it requires. A qualifying triggering event, such as separation from service, reaching age 59½, disability, or death, and a lump-sum distribution of the entire plan balance within one calendar year. Company stock moves in kind to a taxable account; remaining assets may be rolled to an IRA or another eligible plan. Rolling the stock into an IRA forecloses NUA treatment, and that choice is difficult to reverse.

Early-withdrawal penalty. If the distribution happens before age 59½ and no exception applies, the 10% additional tax may apply to the taxable cost-basis portion, not to the NUA. Separation from service in or after the year you turn 55 is one exception that can apply to employer-plan distributions.

California note. California taxes capital gains as ordinary income, so the state-level benefit of NUA is smaller than the federal benefit. Model both.

Steps to evaluate:

• Identify which Chevron plan holds the shares, and distinguish the savings plan from pension benefits.

• Record the shares' cost basis and current value from plan records.

• Map the full plan distribution, including the stock transfer and treatment of other assets, within one calendar year.

• Compare the distribution-year tax effect with the tax treatment of later stock sales.

Hypothetical illustration, for education only. Assume a plan worth $1,000,000, including $400,000 of company stock with a $100,000 cost basis and $600,000 in other assets. Using NUA, the $100,000 basis would be taxed as ordinary income in the distribution year, and the $300,000 of appreciation would be taxed at the federal long-term capital gains rate when sold (at a 15% rate, $45,000 federal if all shares were sold). The $600,000 could be rolled to an IRA and remain tax-deferred. If instead all $1,000,000 were rolled to an IRA, every dollar withdrawn later would be taxed as ordinary income. This example ignores state tax, the timing of sales, and investment changes, and isn't a projection of any actual result.

The Chevron Retirement Restoration Plan is a non-qualified pension supplement; its benefits don't follow NUA treatment. Confirm which assets belong to each arrangement before making distribution decisions, and review cost-basis treatment, distribution-year income, and sale timing with a CPA.

401(K) contribution limits and the ESIP company contribution

A 401(k) contribution is part of an employee's pay directed into a workplace retirement savings account. Chevron employees can use the ESIP to build savings alongside the Chevron Retirement Plan pension, but employee contributions and company contributions follow separate rules.

2026 IRS limits (subject to change):

• Employee contribution limit: $24,500.

• Catch-up for age 50 and over: an additional $8,000, for $32,500 total.

• Higher catch-up for ages 60 to 63: an additional $11,250, for $35,750 total.

• Starting in 2026, participants whose prior-year FICA wages exceeded the IRS threshold must make catch-up contributions as Roth contributions.

Company contribution. The ESIP's company contribution is tied to your own contribution under plan terms. Under the ESIP's design, a modest employee contribution can trigger a substantially larger company contribution, so confirm in the current summary plan description exactly what contribution rate earns the full company amount and what counts as eligible pay.

Compensation limit. The IRS caps the pay a qualified plan can count ($360,000 for 2026). High earners who reach that limit partway through the year may stop receiving company contributions on later pay. Check the SPD for how contributions are calculated once you hit the limit, and how a bonus affects timing.

To enroll or change contributions, follow the current ESIP instructions, submit your election through the plan's designated process, then check a later pay statement to confirm it was applied as intended. Track year-to-date contributions rather than relying on a single paycheck estimate.

The pension and ESIP serve different roles: one provides a plan-defined benefit, the other reflects contributions and investment results. Investment values can rise or fall, including loss of principal.

Retirement income, rollovers, and tax planning

Retirement income planning brings pension payments, savings, and other resources into one cash-flow view. Map each benefit's timing and tax treatment before deciding how to receive or move retirement assets.

Accessing savings without an early-withdrawal penalty

The 10% additional tax generally applies to retirement-plan withdrawals before age 59½ unless an exception applies. For employer plans such as the ESIP, separation from service in or after the year you turn 55 is one such exception. That exception doesn't carry over if the money is first rolled to an IRA, so the order of decisions matters for anyone retiring between 55 and 59½. Penalty rules are separate from ordinary income tax.

A rollover moves eligible retirement assets from one account or plan to another. Compare the available choices, including leaving a balance in the plan, and document what would move, where it would go, and how. If company stock is involved, consider NUA before initiating a rollover, since a completed transfer can limit later choices.

Benefits after leaving or retiring

The Chevron Retirement Plan and ESIP are separate arrangements, so leaving the company doesn't make their payment choices identical. Start with current statements and plan documents for each. Record pension payment elections, ESIP distribution options, and outstanding incentive awards, then align expected payment dates with Social Security and other income.

A calendar-year view can help you and your CPA assess when taxable income arises from pension payments, account distributions, and deferred compensation, whose schedule may differ.

• List each Chevron benefit separately: pension, ESIP, and applicable incentive awards.

• Document whether each account will remain in its plan or move through a rollover.

• Compare expected payment dates with other retirement income.

• Review tax consequences with your CPA before making an election.

Cadence Capital Investments and Chevron employee retirement planning

Cadence Capital Investments provides financial planning and Chevron employee retirement planning from its San Ramon office. If you're weighing retirement choices, the firm can help you coordinate ESIP, pension, company stock, and severance decisions as part of one plan built around your circumstances. For ongoing investment decisions or the move from saving to retirement income, it also provides investment management and retirement income planning.

Serving San Ramon

For Chevron employees and retirees, retirement planning in San Ramon is a local conversation. Cadence Capital Investments is a financial advisor in San Ramon, at 2333 San Ramon Valley Blvd, Suite 200, close to Bishop Ranch and the Dougherty Valley, where many Chevron and AT&T professionals live and work. The work starts with the employer decisions in this article: pension elections, ESIP rollovers, company stock, and deferred compensation, then connects them to income, investments, and protection. Meetings are available in person or by phone and video. Schedule a complimentary conversation with Jamie Hargrave or call (925) 314-8513.

Frequently asked questions

What pension benefits are available to Chevron employees and retirees?

Chevron employees may have benefits through the Chevron Retirement Plan, the Employee Savings Investment Plan, and, for some, the Retirement Restoration Plan or incentive arrangements. Applicable benefits depend on plan eligibility and employment history. Compare your latest statements with plan documents, then note which benefits are vested, payable later, or subject to award conditions.

How are Chevron retirement benefits taxed, including pensions and 401(k) withdrawals?

Pension payments and withdrawals from pretax 401(k) savings are generally taxable as ordinary income, while company-stock distributions may qualify for NUA treatment. California taxes these at the state level as ordinary income. A withholding amount isn't necessarily the final tax owed. Coordinate the timing of payments with other income, and ask a CPA to review federal and state effects.