Find Financial Advisors for Oxy (Occidental Petroleum) Employees & Executives: Q&A Insights from the Experts

Goff Financial: To provide truly customized investment management and personalized financial planning, we begin our relationship by gaining a thorough understanding of Oxy employees’ needs. We ask specific questions that go far beyond the retirement benefits at Oxy. The answers to these questions help us better understand the entire financial picture, such as:

1. Funds and/or assets outside of work plans
2. Goals and plans surrounding retirement
3. Social Security benefits and more

Looking at the big picture helps us better define not just their comfort level with risk, but also their capacity for risk. We never want to make investment decisions in a vacuum. Such decisions can ignore important factors like tax impact, company-specific risks, and future potential returns.

Goff Financial: The most common points of confusion surrounding Oxy benefits are usually associated with what to do near retirement.

For instance, Oxy employees may not know they have the option to potentially save thousands in taxes through a Net Unrealized Appreciation (NUA) transfer when rolling over their Oxy 401(k) plan. You only get one chance to use NUA, so it’s usually a good idea to do this type of transaction with the guidance of a qualified financial advisor.

Another common question regarding the Oxy Retirement Pension Plan is, “Should I take the annuity option or the lump sum?” There are many factors to consider here, since each option has potential benefits and drawbacks. Additionally, each option can drastically impact the odds of outliving your assets in retirement. For instance, a common misconception regarding the annuity option is that future payments are insured by the Pension Benefit Guaranty Corporation (PBGC). Unfortunately, this is not accurate.

Before deciding which option is best for you, we recommend conducting a financial plan to assess how each decision may impact your retirement.

Little is understood about the Oxy Deferred Compensation Plan as well. If you participate in this plan, then careful tax planning in retirement should be done as the timing of other benefits can potentially increase tax liabilities.

Goff Financial: Health Savings Accounts (HSAs) are another great saving tool. Unlike an FSA, contributions roll over each year. In addition to being excellent emergency funds for unexpected medical expenses, they can also serve as an additional investment vehicle for retirement.

For Oxy employees that enjoy continuous learning, be sure to utilize the Educational Fee Reimbursement program, where you can get reimbursed up to $50,000 for pre-approved courses.

Goff Financial: Leaping to another company can be daunting. However, if the new opportunity provides substantial benefits above Oxy’s, it can be worth the effort and risk. However, there are many items to consider before making the decision, such as:

1. How much vesting in my 401(k) will I give up if I leave?
2. Will the health insurance benefits be equal to or better than Oxy?
3. Do I have adequate savings set aside if the new opportunity doesn’t work out?

After leaving Oxy, deciding what to do with existing Oxy benefits should be a top priority. Dealing with these items before starting with a new employer is preferable as beginning a new job can be strenuous, leaving little time to focus on personal financial matters. A financial advisor can help move this process along and ease the burden of figuring these things out.

Goff Financial: For some, shifting from a bi-weekly paycheck to drawing funds from their savings can be a bit of a mental adjustment. However, a solid financial plan can help determine an appropriate withdrawal rate and help soon-to-be retirees gain peace of mind.

While this transition is often focused on financial matters, a commonly overlooked area is how to fill up time in retirement—determining what to do with your upcoming free time before retirement is critical. It is important to stay active and social for both physical and mental health. Volunteering, for instance, may provide mental and physical stimulation.

Goff Financial: Many people never work with a financial advisor before retirement. This is unfortunate as a great financial advisor can provide tremendous value throughout various life stages, not just in retirement.

For people that are considering using a financial advisor for the first time, I highly recommend looking at “fee-only” financial advisors first. A fee-only financial advisory firm has far fewer potential conflicts of interest over traditional financial advisor businesses as fee-only advisors don’t get paid from commissions or fees on products they recommend.

For people on the fence on whether they need a financial advisor or not, I suggest you ask yourself the following questions:

1. “Do I have the time and/or energy to adequately manage my investment portfolio?”
2. “Do I have the temperament to make investment decisions based on thorough fundamental analysis and research?”
3. “Is there a person or company my surviving spouse can trust to take over my investment responsibilities.”

If the answer to any of the questions above is “no”, then working with a financial advisor, or at the very minimum, establishing a relationship with one may be beneficial.

Goff Financial: Before interviewing advisors, establish your advisor selection requirements in writing. For example, if you need help with your investments, your goal should be to find an investment advisor you can trust with the experience and expertise to meet your needs. To help ensure you are getting the most objective advice possible from your investment advisor, you should require the following:

1. Specializes in investment management;
2. Fiduciary duty to put your best interests first;
3. Fee-only; and
4. Independent.

Before you start asking an advisor questions, here are some terms you should first familiarize yourself with before contacting any prospective advisor:

1. Fiduciary duty: A legal requirement to put your best interests first. Not all advisors are fiduciaries.
2. Fee-only: To eliminate potential conflicts of interest, a fee-only investment advisor is paid only by the client and is not compensated by commissions or fees from financial products.
3. Independent: An independent advisor works directly for you and is not employed or controlled by any bank, broker, mutual fund, or insurance company.

To help confirm that the advisor is fee-only, ask these “clarification” questions:

• Do you receive any compensation from any party other than your clients? (YES or NO)
• Preferred answer if you want a fee-only advisor: “NO, I am only paid by my clients.”
• Do you have a fiduciary duty to put my best interests first?
• Preferred answer: YES

Once you’ve established that the advisor is fee-only, you should then shift your focus to uncovering their areas of competency:

• What is your area of specialization?
• If your primary need is investment management, look for advisors specializing in managing investments rather than financial planning, tax, or legal advice.
• You also want an advisor that is very familiar with the Oxy retirement benefits to reduce the possibility of something going wrong.

Do not underestimate how complicated the decision can be to select an advisor. Take your time deciding. Advisor/client relationships are often solidified over years, not weeks or months.

Goff Financial: Retiring can be scary, and most people only retire once. So it is no surprise that the process can cause worry and anxiety. Fortunately, our clients can depend on our years of experience helping people make the transition. There is no better feeling than seeing the joy and excitement on a client’s face when they’ve finally entered the next stage of life. With help and guidance from a qualified financial advisor, retirement doesn’t have to be as daunting as it may seem.

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Goff Financial: To learn more about how we serve Oxy employees, please visit Retire from Occidental Petroleum (OXY) Strategies for Retirement (gofffinancial.com) or call us at 713-850-8900.