Houston, Texas
Planning for Houston households, where energy, medicine and space sign the paychecks.
About 110,000 Houston households earn $200,000 or more a year, more than in any other city in Texas, and a distinctive set of employers writes those checks: eight major energy companies are headquartered in the area, the Texas Medical Center employs more than 120,000 people, and Johnson Space Center anchors a federal workforce. A pension with a lump-sum option, performance shares that vest on a commodity cycle, a FERS annuity, and a home whose flood map matters as much as its tax rate: that is the Houston planning problem.
The situation
One city, three payrolls
Houston is a city of about 2.33 million people and 930,000 households. The Census counts 110,052 of those households at $200,000 or more, and much of that income traces to three engines. Energy: ExxonMobil in Spring, Chevron (headquartered in Houston since its 2024 move from San Ramon, California, announced when it already had about 7,000 employees in the area), ConocoPhillips, Phillips 66, Baker Hughes, Halliburton, SLB and Occidental all file with the SEC from Houston-area addresses. Medicine: the Texas Medical Center, with 120,000-plus employees and 10 million patient encounters a year. Space: Johnson Space Center, where NASA’s Texas workforce runs to about 3,000 civil servants and more than 17,000 contractors.
Each payroll produces its own balance sheet. An energy career can end with a defined-benefit pension that pays as an annuity or a lump sum, next to years of restricted stock and performance shares in a single company whose price follows oil. A physician household carries a late start, a high income and often a practice or partnership interest. A federal household has a FERS annuity, a Thrift Savings Plan and a retirement date set by formula. Under all three sit Harris County property tax, a flood map, and a state with no income tax.
Why it’s complex
Five Houston decisions we plan around
The energy pension: annuity or lump sum
ExxonMobil’s proxy statement describes a qualified pension of 1.6% of final average salary per year of service, less a Social Security offset, payable as a lump sum or in annuity forms; Chevron’s Retirement Plan likewise offers a single lump sum or several annuities. That election interacts with the vesting calendar, a severance year if a downturn brings one, and the bracket in the year the money moves.
Executives and equity compensationPhysician households at the Medical Center
The Texas Medical Center spreads across 54 million developed square feet and employs more than 120,000 people. Physicians here tend to start saving late, hold a 403(b) or 457(b) alongside a practice interest, and pay the top federal brackets with no state tax to deduct. The order in which accounts are filled matters more than the choice of funds inside them.
How we work with physiciansFERS, the TSP and a Johnson Space Center retirement
A FERS basic annuity pays 1% of high-3 salary for each year of service, or 1.1% for those retiring at 62 or later with 20 years. The TSP adds an automatic 1% and matches up to 4% more. The plan for a NASA household turns on the retirement date, the survivor election, and how the TSP is drawn next to Social Security.
Social Security timingHouston’s own exemptions, and the Harris County stack
The City of Houston exempts 20% of a homestead’s value from city tax and a further $260,000 at 65 or if disabled, on top of the state’s $140,000 school exemption; Harris County adds its own 20%. Separate lines on the same bill come from the Flood Control District ($0.04966 per $100 in 2025) and Harris Health ($0.18761), each set by its own governing body.
The flood map is a financial document
Harvey flooded 154,170 Harris County homes in 2017, and 68% of them sat outside the mapped 100-year floodplain. Nationally, FEMA reports that nearly a quarter of flood-insurance claims come from outside high-risk zones. We treat flood coverage as a balance-sheet decision for every Houston homeowner, whether or not a lender requires it.
Sources: U.S. Census Bureau, ACS 2020–2024 5-year estimates; Houston ISD, tax information; City of Houston, over-65/disabled exemption; Harris County Flood Control District, final Harvey report; Harris County Tax Office, 2025 adopted rates; SEC EDGAR filer addresses; Texas Comptroller 2025 city rate report.
Our approach
One plan across the payroll, the house and the map
We start with the employer plan documents, because in Houston the pension election, the vesting calendar or the FERS formula sets the shape of everything else. Property tax gets its own line. A worked example on a home at Houston’s median value of $277,800: the $140,000 school exemption leaves $137,800 subject to school tax, and at Houston ISD’s 2025 rate that is about $1,210 a year ($137,800 × $0.8783 / $100). The city’s 20% exemption leaves $222,240 subject to city tax, about $1,154 at $0.51919 per $100; at 65, the $260,000 exemption takes the city portion on a median-value home to zero.
Manage the concentration
Restricted stock, performance shares and ESPP purchases in one energy name, a physician’s practice buy-in, or a TSP allocation, each sized against the pension or annuity the employer has already promised.
Price the election
Lump sum versus annuity at the interest rates in force, severance and unused leave landing in a single tax year, the rule of 55 and company stock in the 401(k), and health coverage bridged to Medicare.
Draw from the right account
Social Security timed against the pension or FERS annuity, Roth conversions taxed federally only, the over-65 exemptions on the house, and Medicare premium thresholds watched two years ahead.
The work
What you’ll work through with us
- Pension lump-sum versus annuity analysis for energy-company and federal households
- RSU, performance-share and ESPP planning, including concentrated positions
- Severance-year tax planning when a downturn ends a career early
- FERS, TSP and Social Security coordination
- Physician cash-flow, 403(b)/457(b) and practice-interest planning
- Homestead, over-65 and city exemption filings with the appraisal district
- Flood-insurance and property-insurance review as part of the balance sheet
- Investment management and coordination with your CPA and estate attorney
Planning is led by Theo Halbardier, CFP®, CIMA®, CAIA®, the firm’s founder. We are fee-only: no commissions, no product sales. About Theo
Questions
Common questions from Houston households
Do you have an office in Houston?
We meet Houston households by video, and in person by arrangement when that is useful. We do not keep a public office location.
Should I take my energy-company pension as a lump sum or an annuity?
It depends on the interest rates and mortality tables used to compute the lump sum, your health and your spouse’s, how much other lifetime income you have, and what the rest of the balance sheet already holds in that employer’s stock. We run both paths through the full plan before the election window closes, because most plans do not allow a change afterward.
A downturn looks likely. What should we do before a layoff?
Know the vesting dates you would forfeit, what severance and unused leave would add to that year’s income, and how long health coverage runs. A severance year is often the highest-income year of a career, which changes the timing of stock sales, charitable gifts and retirement-plan withdrawals. Building the cash reserve before the announcement is the part most households skip.
We are looking at a home in Katy or Cypress. What is a MUD tax?
A municipal utility district is a local government, supervised by the Texas Commission on Environmental Quality, that borrows to build a subdivision’s water, sewer and drainage systems and repays the bonds with a property tax of its own, on top of the city, county and school lines. Rates vary widely: Fort Bend County’s 2025 rate sheet lists districts from $0.18 to $0.965 per $100. Read the MUD notice before you sign, and remember the rate usually falls as the bonds retire.
Our house is outside the floodplain. Do we still need flood insurance?
The map is a probability estimate, not a promise. Two-thirds of the Harris County homes that flooded in Harvey were outside the 100-year floodplain, and coverage is available in lower-risk zones at lower cost. We weigh the premium against what a flooded home would do to the rest of the plan, including the retirement accounts you would otherwise draw on to rebuild.
How are you paid?
We are fee-only. Clients pay us directly for advice and management; no product commissions, no revenue from anyone else.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Tell us where you are.
The first conversation is 30 minutes. Bring your questions; no preparation needed.
We work with individuals and families across Houston and throughout Texas, meeting by video or in person by arrangement.
Meet with usWe do not maintain a public office at this location; Houston is part of the area we serve. Figures reflect law and published rates as of September 2026 and may change.