The ConocoPhillips Exit Playbook
- Gary Birdsall Jr., JD, CFP®
- Nov 7, 2025
- 6 min read
What Every Employee Must Know Before Accepting Severance,
Rolling Over a 401(k), or Choosing a Pension Option
You’ve given decades to ConocoPhillips
The people, the projects, the pride—it’s been a major part of your life.
And now, with layoffs and voluntary severance packages on the table, you’re staring at some of the most important financial decisions you’ll ever make—decisions that could shape your next 30 years.
Do you take the package? Can you afford to retire? How do you handle the pension, the 401(k), the health coverage?
For many, this moment feels like standing at the edge of a cliff—equal parts fear and possibility. The uncertainty is real. But so is the opportunity.
Because with proper planning, clear understanding, and wise execution, this transition doesn’t have to mark the end of a career. It can be the beginning of something better: greater flexibility, financial independence, and confidence in what comes next.
This guide is designed to help you slow things down, see the full picture, and make decisions that turn this moment of uncertainty into a foundation for your next chapter.
The Real Challenge:
Too Many Decisions, Not Enough Clarity
Most people facing a severance or early retirement don’t fail because they make bad choices. They struggle because they make isolated ones.
You might roll everything into an IRA without realizing you just closed the door on powerful tax advantages like Net Unrealized Appreciation (NUA) or the Rule of 55.
You might choose the pension annuity because it feels safe—not realizing it could trap you in higher tax brackets for life.
The key isn’t just making good decisions. It’s making coordinated ones.
Turning Confusion into Opportunity
It turns out that some of the biggest opportunities at retirement are hidden inside the complexity.
When you understand how the pieces fit together, you can often reduce taxes, increase flexibility, and retire with more confidence.
Here are the areas where smart planning can make all the difference:
ConocoPhillips Stock: The NUA Opportunity
If you have ConocoPhillips stock inside your 401(k) or CPSP, you may be sitting on one of the most powerful—and most overlooked—tax strategies available:
Net Unrealized Appreciation (NUA).
Your cost basis = what you originally paid for the shares.
The unrealized appreciation = today’s value minus your cost basis.
If you roll into an IRA, the entire value is taxed as ordinary income when withdrawn.
With NUA, the IRS allows you to separate the two:
Cost basis taxed once at ordinary income rates.
Appreciation taxed later at long-term capital gains rates (15–20%).
For many Conoco employees, that difference can mean tens or even hundreds of thousands in lifetime tax savings.
Example: Long-Tenured Employee (24% income tax / 15% capital gains)
10,000 shares bought at $20; now worth $90.
IRA rollover: $216,000 in tax
NUA strategy: $154,500 in tax
Savings: $61,500
And that’s before factoring in the ability to control when you sell and spread capital gains across multiple tax years.
“I thought rolling everything to an IRA was the safe move. I didn’t realize it would cost me over $60,000 in taxes.” - Former ConocoPhillips employee, retired
Pension Choices: Lump Sum or Annuity?
For employees with pension benefits, this may be your single biggest decision. Both paths have tradeoffs:
Choice | Annuity | Lump Sum |
Pros | Predictable lifetime income | Liquid, control, higher grow potential |
Cons | Fixed payments, higher taxation, limited inheritance | Market risk, requires management |
An annuity offers stability but limits flexibility—every payment is taxed as ordinary income and usually ends when you and your spouse pass away.
A lump sum allows you to invest, manage taxes, and pass remaining assets to heirs.
There’s no one-size-fits-all answer. The right choice depends on your cash flow needs, health, legacy goals, and tax picture.
401(k) Rollovers and the Rule of 55
Your 401(k) is likely your largest financial asset. Rolling everything into an IRA feels simple, but it can close off valuable options:
Rule of 55: If you separate from service after age 55, you can take penalty-free withdrawals from your 401(k). Once rolled to an IRA, that option disappears.
NUA access: Must be done from the employer plan before rollover.
Sometimes, the best move is to keep funds in the 401(k) temporarily, preserving flexibility while you plan.
The Mega Backdoor Roth
Some ConocoPhillips employees don’t realize their plan allows for a Mega Backdoor Roth, a powerful way to create tax-free income later.
By converting after-tax contributions to Roth, you lock in future tax-free growth and diversify your tax buckets. This can pair beautifully with NUA and lump-sum strategies to balance pre-tax, Roth, and taxable income in retirement.
Severance, Healthcare, and Cash Flow
Severance pay, COBRA coverage, and early retirement income need to work together.
COBRA may bridge to Medicare but can be expensive.
Severance payments can spike your taxable income if not timed or withheld carefully.
Medicare eligibility at 65 must be coordinated with income planning to avoid surcharges.
Aligning these moving parts is the difference between a smooth glide path into retirement and a stressful transition.
The Net-of-Tax Effect Over Time
Saving taxes today doesn’t just reduce this year’s bill—it compounds.
A $100,000 tax savings invested at 6% could grow to more than $320,000 in 20 years.
That difference can fund earlier retirement, better healthcare, or generational wealth.
Why It’s Hard to Do Alone
When facing decisions this complex, there are really three paths you can take:
The Do-It-Yourself RouteYou can piece things together from HR documents and online advice, but it’s nearly impossible to see how each decision affects the others. One wrong move—like an untimely IRA rollover—can close doors forever.
The Product-Driven AdvisorMany advisors sell products, not plans. Their advice may center on rollovers, annuities, or insurance—but not on your broader tax picture, healthcare, or legacy.
The Fiduciary, Planning-First ApproachA fiduciary starts with your goals, values, and lifestyle—then builds a plan that aligns taxes, investments, and income around them. It’s not about selling a product; it’s about giving you confidence in your next chapter.
When the stakes are this high, clarity is priceless.
How This Applies to You
Everything in this guide—NUA, pension choices, severance timing, Roth conversions, healthcare decisions—is part of the planning work I do with employees navigating transitions from ConocoPhillips.
If you're reading this and thinking, “This is exactly what I’m facing, but I don’t know how it all fits together,” you’re not alone. These aren’t one-off financial decisions. They’re connected—and they all affect your taxes, income, and retirement timeline.
That’s where planning comes in. Not a generic checklist. But a clear strategy that reflects your numbers, your timing, and what you want life to look like next.
What You’ll Walk Away With
Working with someone who understands the ins and outs of ConocoPhillips’ benefits isn’t just about investments—it’s about helping you make smart decisions during a major transition.
If we work together, you’ll walk away with:
A clear, personalized plan showing whether taking the severance or staying put makes more sense for your situation
A coordinated strategy for reducing taxes, making pension decisions, and planning how to draw income in retirement
Guidance on how to handle your 401(k), healthcare, and monthly cash flow while things are in motion
Confidence that every piece—NUA, lump sum, Roth conversions, Social Security—is working together, not in conflict
You don’t have to figure this out alone.
If you’d like to see how these strategies apply to your specific situation, I offer a no-cost, no-pressure Getting Acquainted Meeting.
It’s a simple first step to understand your options and gain clarity—before making any decisions that are hard to reverse.
About the Author
Gary Birdsall, Jr., CFP®️, JD
Founder & Financial Advisor, True Financial, LLC
Gary’s story starts in the oil and gas industry. He spent college summers working in shipyards and docks, fished offshore rigs since childhood, and even worked the Deepwater Horizon oil spill during law school—pulling skimmers and doing whatever it took to help. This isn’t just his clients’ world—it’s the one he grew up in.
Over the years, Gary has worked with people across nearly every corner of the oil and gas industry. He understands the benefits, the risks, and the sacrifices. And he has deep respect for the men and women who keep it all running and help fuel the country.
Today, Gary is a CERTIFIED FINANCIAL PLANNER™ professional and licensed Louisiana attorney. Before founding True Financial, he spent years helping people navigate major financial decisions—severance packages, pension elections, NUA, early retirements, and tax strategies—especially during times of transition.
He started True Financial to offer advice that’s clear, conflict-free, and built around people’s lives—not product sales. As a fee-only, independent firm, True Financial exists to serve clients first, always.
Gary lives in Houma, Louisiana with his wife and kids and works with clients across the country—many of whom share the same background, values, and grit as the community that shaped him.
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