Thread regarding Chevron Corp. layoffs

Roll over pension to 401k

Appears we have an option to do a direct rollover of the Pension to the Chevron 401k

Any thoughts on that option ?

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Unfortunately you have to wait until the year you will turn 55, you do not have to wait for your Birthday.

by | Post ID:

I have already retired and I have a few years before I turn 55. Can I still set 72t up ?

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FYI...You can avoid early Retirement withdrawal penalties by taking advantage of government approved 72T...This allows you to avoid 10% early withdrawal penalty when you are 55, just make sure you have a competent Financial Planner that knows how to set up plan. I Retired at 55 from Chevron and have many co-workers who Retired under 72T Rule.

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When you open a Vanguard IRA, is the brokerage option automatically included or go you have to open a Vanguard Brokerage IRA ?

by | Post ID:

When you open a vanguard IRA, is the brokerage option automatically included ?, or do you have to open a vanguard brokerage IRA

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The Vanguard annual fee is waived if you sign up for e-delivery of documents. Otherwise there is a fee for mutual funds with balances below $10,000. The brokerage accounts allow you to buy and sell stocks and ETFs as well as mutual funds. Again, no annual fee with e-delivery. Transactions of Vanguard mutual funds and ETFs are always free. The cost of transactions for other mutual funds, stocks, ETFs. etc. depends on how much you have invested with Vanguard (including your 401K I believe). It's all on their web site.

by | Post ID:

Is there an Annual fee for the Vanguard IRA ?

Also what is the difference between the Vanguard IRA and the Vanguard Brokerage IRA ?

Thanks

by | Post ID:

A good option would be to move the pension to your 401k and then move everything over to a vanguard IRA as you near your withdrawal date

by | Post ID:

The pension plan implemented in 2008 is about 1/3 as generous. And that assumes it stays in place for one's whole career.

by | Post ID:

Iam not yet 55 and I was part of last uear's ROM. So I have to wait till 59.5 to avoid the penalty. Good point about the taxes withheld, although expect my tax rate with the retirement withdrawal to be close to 20 percent so may not be an issue

by | Post ID:

For stability and long term investing, it's very hard to beat Vanguard. Their expense ratios are the lowest in the industry.

by | Post ID:

I agree that the CVX ESIP with Vanguard is a great choice for where to invest your lump sum pension. I did it myself. The direct rollover of my pension to the ESIP was easy and I avoided any taxes because it was direct...you can also avoid taxes by a direct rollover to another investment firm, but Vanguard has extremely low cost ratios for their funds, especially their index funds. Over time, Vanguard's low cost ratios mean I keep and earn more dough, rather than it flowing out to pay the portfolio manages. Be sure to check and compare the cost ratios on similar funds with another investment firm before deciding where to invest. I think you will find Vanguard is hard to beat.

by | Post ID:

, as previously stated by "Savvy Investor", you won't have to wait until you are 59.5 years of age to begin withdrawing from the ESIP 401k. If you separated from Chevron after turning 55, you may withdraw your funds without the 10% IRS penalty. Just be aware Vanguard will always withhold 20% in Federal taxes. Any over-withholding will be paid back as a refund after you file your taxes. That's why good tax planning can be an asset. One strategy (when you become 59.5 years old) could be to transfer only the amount of money you foresee needing for next year into an IRA, then taking the withdrawals from the IRA. You can tell the IRA Plan administrator to withhold only a certain percentage for Federal taxes (or none at all) - your choice.

by | Post ID:

Iam happy with the choices available in the chevron 401K, so for me it makes sense to move my pension into my 401K

As soon as I turn 59.5, Iam going to have start withdrawing from it !

by | Post ID:

I believe that Texaco was using Vanguard so someone had to change, and it was clear to the merger team that Texaco was getting a better deal for their participants than Chevron was getting from State Street. At least that's what I heard at the time. Also, if down the road Chevron moves to an institution you don't like, you can always roll over to an IRA at that point. Don't see that happening though. If you're concerned that Chevron will raid your 401K, don't be. A few unscrupulous companies have done this but it is a criminal offense, and you could sue both Chevron and Vanguard.

by | Post ID:

It is a Chevron ESIP 401k. Chevron may decide to move its ESIP to another institution as it did before some 15 years or so ago. Chevron used to have its 401k at State Street Bank before it decided on Vanguard. Chevron did this because Vangusrd offered lower management fees for its employees. There may have been other reasons too. However, if Chevron moves its 401k again, the rules are not likely to change, as far as protecting you from the 10% IRS penalty for early withdrawal between age 55 and 59.5. After all, wherever the 401k may go in the future, it will remain an Employer 401k plan and you will enjoy the perks that come with that.

by | Post ID:

Since it is still a Chevon 401k account, Is there any impact on the account based on anything that Chevron may do in the future OR is it there no relationship at all ?

by | Post ID:

There are some other things to consider if you choose to do a direct rollover of your lump sum pension into the Chevron ESIP 401k.

1) An advantage to putting your lump sum pension into the Chevron ESIP 401k allows you to take distributions without the 10% IRS penalty before age 59.5. Caveat: You must be at least 55 years of age when you leave Chevron. Also note Vanguard is required by the IRS to withhold 20% in Federal taxes on all withdrawals, except on regularly scheduled monthly distributions, which would only be 10% withholdings.

2) An advantage to putting the lump sum into an IRA would clearly be the additional variety of investment funds offered by such firms as Fidelity, Charles Schwab, Edward Jones (and even Vanguard IRA). The expense ratios or management fees will be higher than that of the Vanguard ESIP, but there's something else to consider... the IRS does not obligate IRA institutions to withhold 20% Federal tax from withdrawals. In fact, you can elect to have 0% withheld. This can be advantageous if you like to control the amount of taxes you would rather owe the government rather than wait for a refund months later.

3) The premise of splitting up your retirement savings to not have everything in one basket is only a "feel good" strategy. The truth is, if Vanguard (or Fidelity, Charles Schwab, etc.) fails and goes bankrupt, your investments are safe and intact. Remember, your investments are in held in actual stock and securities, not in Vanguard or other institution. They are merely administering your investments. They don't own the stock or securities - you do.

So, keep these things in mind when you invest and make choices where you put your hard earned money.

by | Post ID:

Yes. If you take the lump sum option then you can roll it over into your Chevron 401K or into a Rollover IRA. Mostly a matter of what kind of options you want. Chevron's 401K options are pretty good and low cost, but some people want more options or don't want to put all their eggs in one basket. The only other thing I'm aware of is the rules for NUAs mean if must do the NUA before you can have access to any money in your 401K. This only applies to people that have enough Chevron stock to make an NUA worthwhile and want to try it. One thing in favor of the 401K is that it's slightly easier to fill out the forms, since you don't have to figure out what wire information to give them to do a direct transfer into a rollover IRA, but it's really not that hard.

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