As an ExxonMobil employee, you have the option to invest in seven different Investment options through your ExxonMobil Savings Plan. These options can seem confusing to Exxon employees as they try to find the best investments for their unique situation. Often this can leave the employee feeling out of touch or uninformed as to if the investment option they chose will help them maximize their retirement savings and reach their retirement goals. Below we have broken down and summarized the seven different investment options that the ExxonMobil Savings Plan offers to help you better determine what they are, how they function, and if they are worth putting in your portfolio to reach your retirement goals:
- ExxonMobil Stock: This is the simplest option to understand. This investment option allows the employee to directly invest a portion of their Savings Plan in ExxonMobil Stock. This gives the employee the right to the dividends (which are reinvested automatically) and voting rights of ExxonMobil’s Stock. It is important to note that this option invests only in ExxonMobil stock, and any allocation in a singular stock carries with it a higher diversification risk. This is the only investment option that invests solely in a singular stock.
- Equity Units: This is an Index Fund that looks to mirror the approximate rate of return of the S&P 500. It is comprised of a diversified portfolio consisting of publicly traded U.S. common stock.
- Extended Market Units: This Index Fund looks to mirror characteristics of the Dow Jones and includes more U.S. company stocks than the S&P 500. This index is primarily used to represent small and mid-cap market segments.
- International Equity Units: The purpose of this Index Fund is to invest in roughly 3,500 international equity securities and has no U.S. securities. These international securities are comprised of 22 developed market countries and look to closely approximate the total rate of return of the MSCI World Index (excluding the U.S.).
- Bond Units: Bond Units represent an interest in an Index Fund that is comprised of publicly traded, investment grade U.S. Bonds. This index looks to mirror the Bloomberg Barclays U.S. Aggregate Bond Index. Since this index includes short, medium, and long-term bonds, the average maturity is longer than that of investments held in the Common Assets Fund outlined below. This fund tracks U.S. investment grade fixed income securities covering the Treasury, Mortgage-backed securities, and Corporate and US Bond markets.
- Balanced Fund Units: This is an Index Fund designed to generate income and growth for investors through diversifying in the various funds listed above. The percentage investments laid out in this Fund are 35% Equity Units, 15% Extended Market Units, 25% International Units, and 25% Bond Units. While this fund is called a “Balanced Fund” because it incorporates various assets and looks to increase diversification, it is not a fund that is balanced or tailored to the needs of each ExxonMobil employee. It is recommended that you meet with a financial planner to determine the most appropriate investment allocation that fits your unique situation.
- Common Assets: This fund is managed by an ExxonMobil subsidiary and is meant to contain short to medium-term fixed income securities that mature in approximately one year. This fund invests in high-quality fixed income securities such as U.S. government issued Series I and Series EE Savings Bonds. A portion of this Fund is invested in loans to participants. Any earnings in this account are posted to participants’ Savings Plan Accounts at the end of each quarter and are reinvested in Common Assets.
As mentioned in the Balanced Fund Unit description, the correct mix of investments in these funds varies depending on each Exxon employee's specific situation. This is why it is crucial to fully understand these investment options and the purpose and goal of each of them to select the investment mix that helps achieve your goals. To make the most of your ExxonMobil Savings Plan and ensure you are on the right track to meet your retirement goals, it is best to meet with a qualified and knowledgeable financial planner who is well versed in the ins and outs of the ExxonMobil Savings Plan.
If you would like help navigating the most effective way to invest and allocate your ExxonMobil Savings Plan, please feel free to reach out to us here at Rhame and Gorrell Wealth Management for a complimentary financial plan review. Our CPAs and CFP® professionals have years of experience and are happy to help answer any retirement questions you might have.
Rhame & Gorrell Wealth Management, LLC ("Rhame & Gorrell" or "the Firm") is an SEC registered investment adviser with its principal place of business in the State of Texas. Registration does not imply a certain level of skill or training.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own CPA or tax professional before engaging in any transaction. The effectiveness of any of the strategies described will depend on your individual situation and should not be construed as personalized investment advice.
For additional information about Rhame & Gorrell, including fees and services, send for our Firm Disclosure Brochures as set forth on Form ADV Part 2A and Part 3 by contacting the Firm directly. You can also access our Firm Brochures at www.adviserinfo.sec.gov.
Rhame & Gorrell Wealth Management is not affiliated with or endorsed by ExxonMobil Corporation.