Sound Savings & Investment Advice for Offshore Oil, Gas Workers

Sound Savings & Investment Advice for Offshore Oil, Gas Workers
Financial expert Rashonner Lillie offers saving and investment advice to offshore oil and gas workers.

When it comes to financial planning, some people are doing it well, some people are doing what they can and others just aren’t doing it at all. For the latter, poor financial planning can have significant negative impacts on the quality of life of individuals and their families.

According to recent statistics from Bankrate, about half of Americans are saving no more than 5 percent of their income. Additionally, 28 percent are saving something, but less than 5 percent and 18 percent are saving nothing at all.   

For those in the oil and gas industry, the sharp decline in oil prices that began late last year serves as a reminder of the industry’s cyclical nature and reiterates the importance of saving. It’s hard to predict when a downturn will occur, but it’s always good to be prepared financially.

Rashonner Lillie
Rashonner Lillie, Financial Advisor and Associate Vice President, CFP, CRPC
Financial Advisor and Associate Vice President, CFP, CRPC

Rashonner Lillie, who has 11 years of experience as a financial advisor, focuses specifically on the financial needs of people in the oil and gas industry. Lillie serves as financial advisor, associate vice president of McGill, Lillie, Chu and Associates, a financial advisory practice of Ameriprise Financial Services, Inc.

She helps individuals invest and save through downturns, recessions, booms and depressions. Rigzone caught up with Lillie, who shared advice on savings for newcomers to the industry, what to do if you’ve been laid off and how to save during a downturn.  

Rigzone: Can you identify specific types of savings plans you suggest for offshore rig workers? Why do you recommend them?

Lillie: I would suggest they start to contribute to the 401K plan offered by their employer. If they are under age 50, they are allowed to save $18,000 pretax; if over 50, they can save $24,000 pretax. This savings plan allows their contributions to grow tax deferred. Most companies will also match the employees’ contribution up to a certain percentage, such as 5 or 6 percent. Energy companies are very competitive in regards to their matching benefits compared to other industries.

Rigzone: What steps can those new to the industry (less than three years of experience) take to develop a sufficient savings plan?

Lillie: The first step is to establish a liquid emergency savings of three to six months of your monthly expenses. Establish a monthly automatic contribution plan to begin a disciplined savings approach. Secondly, take advantage of your employer benefits such as 401Ks and health savings accounts to reduce your tax liability.

Rigzone: The industry is currently in a downturn. What kind of effect does that have on workers’ savings?

Lillie: If you are still employed, consider doubling your emergency savings to prepare for a potential layoff, but continue to contribute to your employer retirement plan. Try to lessen your company stock exposure so that your portfolio is not overallocated into one company. Many energy employees noticed the value of their retirement accounts decreased substantially due to oil prices falling over the last year and because they held large allocations of energy-related company stock. This was a lesson and reminder to remain diversified in your investment portfolio.

Rigzone: What is the most common savings question you get from oil and gas clients? What’s your response?

Lillie: I am often asked, “Am I saving enough for retirement?” My answer to that question is, “it depends.” Everyone’s financial goals are different and deserve a unique answer, so that is when comprehensive financial planning is utilized. The sooner in your career that you ask these types of questions, the longer you have to make preparations to reach your intended goal.


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