Financial guidance for ENERGY INDUSTRY EMPLOYEES

We have a lot of clients who work in the energy, oil and gas industry, which is well-established here in the great state of Texas. As a result, we have a lot of experience and a very good understanding of the issues and situations our clients encounter – and most important, how to address them.

It’s a very cyclical industry that experiences price swings based on rising and falling commodity prices, which in turn, affects employment status. It forces people who work in the industry to often face major career-related decisions. Should I go from a major company to a mom-and-pop firm? Should I work as a consultant? Maybe even leave the industry altogether?

Of course, these moves also have major financial ramifications that, if not managed correctly, can affect one’s wealth. We guide our clients on every important consideration such as: Do I take a buyout? What do I do with my 401(k) plan? How should I handle my stock options?

We help them with all these decisions at this critical time, and address more universal concerns such as the risk of having too large a percentage of their company’s stock in their portfolio. While mitigating the risk of a concentrated equity position can be complicated, we can provide a variety of strategies that can hedge, monetize, diversify or transfer the position while managing the tax implications.

Receiving employer stock options can also complicate the financial picture, so we offer stock option planning strategies to help determine the opportune time to exercise those options, the tax implications of such actions, and how stock options and other employer benefits fit into the big picture together with retirement and estate planning.


John took an early retirement from a well-known energy company and planned to go back to consulting work he had done previously. He had a company pension plus a 401(k) and wanted advice on his retirement options, and what to do with his insurance benefits.

We worked with John to make sure he understood how going back to consulting work could impact his Social Security, and how it could affect his income taxes and ability to contribute to an additional plan. We educated him on the different retirement vehicles to help ensure he selected the one best suited for his situation.

We also advised John that distributions from tax-deferred retirement accounts are treated as ordinary income. We informed him of the tax-advantaged options recognized by the IRS that could help mitigate his tax burden through employer transition.

Lastly, because of the risky nature of working out in the field, we helped John consider insurance coverage and an estate plan to protect him and his family from the unexpected.

This case study is for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.