The Ultimate Guide to Retiring from Marathon Petroleum Corporation

In this special episode, Josh Robb, Austin Wilson, and Chase Rose introduce The Ultimate Guide to Retiring from Marathon Petroleum Corporation and discuss the retirement decisions every Marathon employee should understand before leaving the company. 

From the Thrift Plan (401(k)) and pension options to Net Unrealized Appreciation (NUA), retiree healthcare, and the often-overlooked non-financial side of retirement, they share insights gained from working with hundreds of Marathon employees over the years. Together, the HZCM team developed a book that covers everything! Learn more, download the free first chapter, get the complimentary workbook companion, or order the book at hzcapital.com/mpc. 

For the full video version, transcript, and show notes, visit thewealthmindsetshow.com/s2e42

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Transcript

You're listening to The Wealth Mindset Show, where Hixon Zuercher Capital Management's team of finance professionals, portfolio managers, and a life coach, come together to tackle complex topics in finance and retirement planning so you don't have to. From investment strategies and wealth management to tax planning, retirement income, and aligning your money with your values and purpose, The Wealth Mindset Show offers the tools to thrive.

Austin Wilson:

All right. Hey, hey, hey, welcome to The Wealth Mindset Show, where the Hixon Zuercher team will have conversations on managing wealth, navigating retirement, and making smart decisions for a secure, meaningful future. I'm Austin Wilson, Chief Investment Officer at Hixon Zuercher Capital Management.

Josh Robb:

I'm Josh Robb, Director of Wealth Management here at Hixon Zuercher Capital Management. Joining us today is Chase Rose, one of our financial advisors here, and we are going to be talking about a book we have just completed for a Marathon Petroleum retiree.

Austin Wilson:

It's pretty exciting.

Josh Robb:

Yes.

Austin Wilson:

So another book comes out of the Hixon Zuercher walls.

Josh Robb:

Yes.

Austin Wilson:

But we've had a lot of years, really our entire history, 23 years, of working with a lot of people who work and retire from Marathon. Guess why? Because Marathon is about 800 feet that way. I think it's that.

Josh Robb:

Did you step it off?

Austin Wilson:

Eight hundred feet, about, that way.

Josh Robb:

Yep.

Austin Wilson:

So we have a lot of friends, colleagues, clients who worked there and have retired from Marathon, so being directly across the street gives us a unique opportunity to walk with a lot of people through some very interesting and unique situations as it relates to their benefits and retirement and stuff like that. Our advisors have had hundreds if not thousands of conversations with people in that very situation, so we felt like we would love to give an opportunity for people to have a resource, right?

Josh Robb:

Yes.

Austin Wilson:

This is all about providing a resource, and this resource has taken a long time to come together, because guess what? A large corporation has a very complex structure for their benefits. And our advisors and our team walked through that just comprehensively, and collectively came together with what actually turned out to be a pretty amazing book. So, live by the time this is published, is ...

Josh Robb:

The Ultimate Guide to Retiring from Marathon Petroleum.

Austin Wilson:

Yeah, we're pretty excited about it.

Chase Rose:

With an asterisk, it's 800 feet away in Austin's feet.

Josh Robb:

Yes.

Austin Wilson:

Yes.

Chase Rose:

As opposed to my own feet.

Austin Wilson:

It's only 400 feet for Chase's.

Chase Rose:

I take wide steps. I mean, you're probably halfway there.

Austin Wilson:

Size 17 feet.

Chase Rose:

Yeah, exactly.

Austin Wilson:

Clodhoppers over there. So Josh, talk a little bit about how and why we wrote the book.

[2:26] - Why & How the Book Came to Be

Josh Robb:

Yeah. So you mentioned it, so Marathon Petroleum is a large company, a large publicly traded company. And as a result, they have a robust benefits package.

Austin Wilson:

It's great. It's a great benefit package.

Josh Robb:

So we're going to talk about Marathon, but this is broad for a lot of people who work for corporations, is understanding what all is available to you and making sure you're optimizing those benefits. Because again, it's a benefit. It's there for you to utilize as an employee of that place. And so one of the things we started and realized was there's a lot of questions, that someone would come sit across from the table from us and ask, "Hey, what about this or that, or should I do this?" And it's like, you know what? We really need to understand all that is offered there and be able to help advise our clients on which things they should utilize, how to best take advantage of all those benefits being offered. And then understanding on the back end as they're retiring, what are the things that they get? What are some of the perks? How will things work on the transition out? Those are the things that they always are asking us as they're ready to retire. So this book was really comprised of looking at the benefits offered and then what you can do with them on the way out through retirement, through your options.

Austin Wilson:

Absolutely.

Chase Rose:

Ashley, who is our Marketing Coordinator, always encourages us that if you are doing the same thing or having the same conversations repeatedly over and over, you should probably document and templatize those ideas and thoughts, and voila, this book was born.

Austin Wilson:

Absolutely. The brainchild of many brains.

Chase Rose:

Absolutely.

[3:59] - Life Updates: Family Time & Ice Cream

Austin Wilson:

So before we get to a couple thoughts on retiring, maybe specifically to the Marathon, it could be more of a broader discussion as well, so what's going on with life, guys?

Josh Robb:

Yeah. For me, we're in summer, so finishing up sports seasons, baseball, softball, all that fun stuff, and we will get a chance to have a little bit of break before school starts. So enjoying the time with family.

Austin Wilson:

Yeah. Chase?

Chase Rose:

My wife and I just celebrated our first anniversary.

Austin Wilson:

Congrats.

Chase Rose:

So last year, we got married on a Saturday. We were both back at work on Monday. And this year we spent our anniversary at the Dairy Whip, just like we ...

Austin Wilson:

You're whipping.

Chase Rose:

... did right after we got married last year.

Austin Wilson:

That's right. Yeah.

Chase Rose:

Yeah, that's us.

Josh Robb:

Good way to celebrate.

Austin Wilson:

Absolutely. Well, my kids went to the Dairy Whip recently, and they love their ice cream.

Josh Robb:

Awesome.

Austin Wilson:

A plug for Kip's Dairy Whip ...

Chase Rose:

Once again.

Austin Wilson:

... in Columbus Grove. We're always plugging the best ice cream in Northwest Ohio.

Josh Robb:

Do you sponsor them? You could.

Austin Wilson:

We gotta pick that up. We gotta pick that up.

Chase Rose:

We haven't been approached about that.

Austin Wilson:

But yeah, kind of similar with our family as Josh. It's warm weather's here, so we're able to spend some time outside, spend some time with the kids. If you're close to South Main and Findlay around post dinnertime, you're probably seeing us with a couple strollers walking around, our whole crew. So we just love to be outside this time of year, and it's going well.

[5:12] - The Most Overlooked Aspect of Retirement

Austin Wilson:

So yeah, let's talk about Marathon and retirement in general. There's one topic that I think is an interesting one that doesn't get enough discussion today, and I think this is one area where our firm is a little bit unique, where we like to focus on maybe things you hadn't thought of before you became retired. Again, this is more focused on the non-financial side of retirement, which we're going to talk about financial in a second, but questions like, "Hey, what are you most excited about for retirement?" And you should probably have an answer for that. That's probably something to think about beforehand. Or asking retirees, "What catches you off guard when you're thinking about planning for such a big transition?"

Other thoughts are, "Well, work, you've been doing it for maybe 30, 35 years, whatever that looks like, maybe longer. What happens when that's not there? You'd need to talk to your spouse about what life at home looks like when you're not at work for 40-some hours a week, and that's been a major part of who you are." And then just a general, I think it's good to have a discussion at this point in your career, at this point in your life with, "What am I here for? What am I all about? What are my passions? How can I find purpose?"

Josh Robb:

Well, that purpose too. So a place like Marathon, a lot of your social connections drive around the people you work with in a large place like that. A lot of the people you know and interact with day in and day out are your coworkers. And if they're not retiring with you, then there is a disconnect there that happens. You're home, they go to work, and all the people you're used to having a relationship with are no longer there. There's that disconnect.

Austin Wilson:

Totally.

Josh Robb:

So that is part of that as well that people have to work through.

Austin Wilson:

Chase, what do you think about the non-financial side?

Josh Robb:

Yeah, I just think those are some of the more important conversations to have, because we've mentioned it a million times here. People know what they're retiring from, they know the benefits that they have, or maybe they do, maybe they don't know the benefits they have available to them, but a lot of people don't know what they're retiring to. So we've talked about it a million different times. It's included in the book partially as well. We're not going to spend too much time on it, but it is definitely an important aspect of it.

Austin Wilson:

Yeah. So when you pick up the book, available e-book or physical book, or just ask us and we'll send you one, the whole first chapter is actually dedicated to the non-financial side.

Josh Robb:

There you go.

[7:19] - The Biggest Retirement Questions We Hear

Austin Wilson:

So this is more of the soft side of retirement and thinking about the whys and the thinking behind that, but that doesn't mean the financial side is not important. The whole rest of the book is focused on the financial side and the benefits side and all of these things. So let's talk about some of those questions that, when we hear specifically maybe Marathon retirees talking about, "Hey, I'm thinking about retiring, what financial questions do I need to ask," questions like ... and you guys can feel free to jump in with some thoughts on this ... "What do I do with my pension?" And you're going to say, "It depends."

Josh Robb:

Yes. It always does.

Austin Wilson:

But beyond, "It depends," Josh.

Josh Robb:

Well, first of all, that's a rare thing nowadays. In today's world ...

Austin Wilson:

Yeah.

Josh Robb:

... having a pension that's still part of a retirement benefits package is unusual. Not a lot of firms and companies keep that. So Marathon is one of those that has a 401(k) and a pension for most employees. There's some caveats to that as well, but in general, that's one thing that you don't see a lot of in other employments, is a pension along with a 401(k).

Austin Wilson:

Absolutely.

Chase Rose:

Yep. Yeah, and when you are analyzing what to do with the pension, there's two primary options for you. One is to take the lump sum, the value of the pension itself, roll that into a retirement account and invest it, and the other is to take some type of annuity. And even within those two options, there's such a deeper analysis that goes into it. When you're investing that money, well, that money historically has been invested very conservatively because of how the pension is structured. So do you invest those funds conservatively moving forward, or do you take a little more risk and invest more in the stock market? Or if you're taking the annuity, should you have a survivorship? What kind of benefit do you need for your plan? Because longevity is a really important and detailed conversation to have within a retirement plan. So not even just pension or lump sum, or annuity or lump sum. It's a lot deeper between those two subject areas as well.

Josh Robb:

Correct. Yeah, there's a lot of caveats and it's all situational. So do you take a lump sum and then get life insurance to offset the risk of passing away before it could pay fully out?

Chase Rose:

Yeah, absolutely. If you annuitize it, how much of the survivor benefit do you need? Because the more survivorship you get, the less they pay up monthly. All those trade-offs, so you have to analyze for your situation.

Austin Wilson:

And of course, one of the key questions everyone wants to know is, "Well, I was working all these years and I retired and I was at Marathon," probably doing pretty well, making a very good living, a consistent paycheck. "How much can I continue? Now I've stopped working. The paycheck stops. How much can I spend?" In the book, we definitely talk about a little bit, not necessarily details, but a little bit of how to get to where we're talking about there, because that's a key number. Everyone wants to know, "Well, what's my new budget, now that I'm not earning an income?"

Josh Robb:

Yeah. And the first question I always ask back, because people ask that question a lot, is, "Well, how much do you spend now?" Because what we know is most people don't drastically change their lifestyle just because they retire. Some people think, "Oh, man, when I retire, I'm going to spend way less." We know in reality you really don't do that. So the first question is always, "Well, how much am I currently spending," and then you can start from there and then back out some of the things you think that might go away, or add to some of the things you're going to start doing.

Chase Rose:

Maybe you want to do more traveling.

Austin Wilson:

Yeah, exactly.

Chase Rose:

And even deeper, once you have figured out that big number as far as what you're going to be spending, where do I spend from? Because oftentimes within the 401(k) you have numerous different tax buckets, and which tax bucket you choose to pull from has a really big impact on your tax plan, which boils down to the financial plan as a whole.

Josh Robb:

And that goes back to Marathon offering a lot of different opportunities within their 401(k) on how you save. And so again, there's multiple ways of saving there, which gives you multiple ways of withdrawing, in the future, different tax strategies from that.

Chase Rose:

And even within the 401(k), you could also have some Marathon stock in there as well that is offered, in addition to all the funds that they have available within there. And if you do have appreciated Marathon stock, there is a huge opportunity or analysis that you have to determine whether it's an opportunity or not as far as net unrealized appreciation. It's a huge, huge numbers game trying to figure out how can I save in taxes, should I diversify, what do I do here.

Josh Robb:

Yeah. Really what that does is the bottom line of that is how is my withdrawal taxed. Is it done at income tax rates or capital gains rates? And there's some things you can do through company-owned stock that could give you potentially a better tax structure that makes sense in your plan.

Chase Rose:

You have to make sure you do that before you sell your stock, though. So don't sell stock and then say, "Hey, can I do this now?"

Josh Robb:

Yeah, and then the last one is the healthcare. And again, while you're working, like a lot of employees, you just have healthcare. But as you get close to retirement, you have to start thinking, "Okay, what benefits do I get post-employment, if any? And then what do I do to offset those? What are my costs that I'm going to have to incur that I was being subsidized by my employer before?" So there's a lot to healthcare when it comes to retirement as well.

Austin Wilson:

Well, and the other one that we didn't talk about was Social Security. So that's something that there's a section in the book about, when to claim and all these things. We actually just did an episode not long ago, so you can scroll back on your player and find that, about six different examples of when you should not claim early, which will also hone in, help you hone in, on maybe when that is. So check out that in the book as well. But let's wrap this up by talking about some examples and some common traits that we see in people who we would say do retirement well, right, so they would successfully retire. So what do these guys do?

Josh Robb:

I mean, the big thing is people don't stumble into successful retirement. People who do it well start early and start planning, and then they are adaptable to adjust their lifestyle and their goals to where they're at situationally. And that's the successful people for retirement planning, is start early, enough time so you can make adjustments, and then make those adjustments or make adjustments to your goals based on where your life situation is.

Chase Rose:

It's also really important to ask questions, because you can develop your own I wouldn't say biases, but your own perspectives over time on what might be available to you, and your understanding might be different from someone else, because we do know there are hundreds and hundreds of pages defining these benefits that you have available to you. They can sometimes be articulated one way or another, so it's important to have conversations with people about it, get some advice, see how other people have done it in the past. It's really important to have a collaborative effort to build your plan out.

Austin Wilson:

I do think also just some knowledge of the situation. So you gotta know about your current retirement situation, your benefits package, like you talked about, but we also need to know, like we talked about earlier, you have to know what your spending is. If you know those two pieces together, you have a pretty good shot at putting the whole picture together. Those are two major picture or major things in this. And then on the non-financial side, when you go into retirement, to be successful, we would say you should probably have an idea of your vision for retirement. What does my Tuesday look like?

Josh Robb:

What are your values?

Austin Wilson:

What are your values? So have an idea of that. And then last but not least, you don't have to do this alone. Some people do it alone and do it well, but you don't have to do this alone. And there are a lot of people, and you can check us out if you'd like, but there are a lot of people who are here to help and walk with you through that transition, through all those questions, through the discussions, through the benefits, who, without having to dig into every single of the 400 pages by yourself, have probably done it before, so that's where I would say. Working with a qualified financial advisor is definitely something worth looking into as you're making that big change.

Chase Rose:

Yeah, I would say we maintain an abundance mindset here. We are not the only financial advisors out there. We don't expect to work with everyone, right? With Marathon being the company that they are, there are many people out there who have done their best to learn a lot about the Marathon retirement plan, so there's a lot of people out there that you can get advice from. Just make sure that you're getting advice, because like we said earlier, it's important to get other people's perspectives on what's available to you.

Austin Wilson:

Yep. Any overall stories, thoughts on some Marathon retiree situations in your guys' lives?

[15:14] - The Opportunities of Retiring from MPC

Josh Robb:

I'll just say this one because you see it with this company often, and that's early retirees. So Marathon does allow some nuances on withdrawals out of their retirement plans for people before 59 and a half, which is the normal time to take withdrawals without penalty. So we've worked through situations like that where you see some. You have to be smart on where you draw money from to avoid extra tax that's not necessary.

Chase Rose:

Yeah, we've definitely had a number of individuals who, because of the great benefits and their own diligent savings over time, have been able to retire at a very early age. And as we approached that age in planning, the question was always, "Yeah, I'd like to retire at 55 or 56, but where am I going to get my money from? I can't take before 59 and a half," but you can actually start withdrawing from the ...

Austin Wilson:

Even as early as the year you turn 55.

Chase Rose:

Exactly. Absolutely. So that's certainly something to keep in mind, because not a lot of people know that.

Austin Wilson:

Yeah.

Josh Robb:

And then you mentioned company stock. That's another thing we've worked with, on just the most efficient way, based on what their plans and goals are, of what to do with that company stock. And it's not the same for everyone, because based on what you need and what you're planning on doing, whether you take the net unrealized appreciation approach or put it into an IRA depends on what your goals are. But there's two different ways those are taxed down the road.

[15:14] - The Ultimate Guide Available Now!

Austin Wilson:

Yeah, absolutely. So there it is. That's the book. We hope you go read it. We hope you go buy it. If you want one, we'll send you one. So send us an email at hello@hzcapital.com, but you can also check out more about the book. You can even download the first chapter for free if you go to hzcapital.com/mpc, so check that out. And if you found value in our conversation, maybe you know someone who works at Marathon, is getting near retirement, is thinking about it. Hey, send them this episode. We'd be grateful if you did. And don't forget to subscribe to The Wealth Mindset Show on whatever platform you're listening to, so you don't miss any episodes. You can always visit thewealthmindsetshow.com for more resources or check out what we do at hzcapital.com. Otherwise, follow us on social media. We'd love to catch up. And until next episode, have a good one.

Josh Robb:

Talk to you later.

Chase Rose:

Bye.

Thank you for joining us at The Wealth Mindset Show, where we tackle the complexities of finance and life planning to help you align your wealth with your values. We hope today's conversation provided value and clarity as you navigate your financial journey.

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