For Texas Instruments employees
Planning for Texas Instruments employees, one vesting date at a time.
TI restricted stock units generally vest in a single block four years after grant, and in 2025 profit sharing paid 19.06% of base salary to every eligible employee. We coordinate those cash events with the ESPP, the 401(k), and, for longer-tenured employees, the legacy pension.
The situation
A benefits package shaped by your hire date
Two TI engineers at adjacent desks in Richardson can have very different retirement plans. Employees hired after December 2003 receive a 401(k) match of up to 4%. Those hired from December 1997 through 2003 also receive a fixed 2% company contribution. Anyone on the U.S. payroll before December 1997 may still be earning a traditional pension, with a smaller match alongside it.
Equity has changed shape too. The TI stock fund inside the 401(k) has been closed to new money since April 2016, so company-stock exposure now builds outside the plan: through RSUs, stock options for eligible employees, and ESPP purchases. For many households the largest single holding is a stock they never chose to buy in one decision.
The backdrop is a company in the middle of a large build. TI has committed more than $60 billion to U.S. fabs, including up to $40 billion in Sherman, where the first new 300mm fab began production in December 2025. At the same time, the multi-year closure of its two remaining 150mm factories in Dallas and Sherman brought layoff notices in late 2025. Both paths raise the same question: what does the plan look like if the next move comes sooner than expected?
Why it’s complex
Five TI-specific decisions that compound
RSUs arrive in four-year blocks
RSUs generally cliff-vest four years after grant. Once annual grants overlap, a vest lands every year, and the full value is taxed as ordinary income at vesting whether or not shares are sold.
Equity compensation and concentrated stockThe ESPP discount has no lookback
Shares are bought at 85% of the price on the purchase date, in four offerings a year, up to the IRS $25,000 limit. The discount is taxed as ordinary income; how long shares are held decides how the rest is taxed.
Planning after a large gain55 with 10 years is a bright line
At 55 with 10 years of service, or at 65, unvested options and RSUs held at least six months keep vesting after retirement. Leave earlier and unvested RSUs are generally cancelled. The 401(k) Rule of 55 turns on a similar age.
The Rule of 55The pension offers seven ways to be paid
Legacy participants earn 1.5% of their highest five-year average pay per year of service, less a Social Security offset, payable as a lump sum or one of six annuities. Lump-sum values move inversely with interest rates.
Turning savings into incomeRetiree medical depends on hire date
Employees hired after January 1, 2001 pay the full cost of TI retiree medical coverage. Retiring at 55 leaves a decade before Medicare that needs its own line in the budget.
Medicare’s enrollment windowSources: Texas Instruments 2026 proxy statement (profit sharing, retirement eligibility); Texas Instruments 2025 Form 10-K, Note 3 (RSU vesting, ESPP pricing). Terms vary by hire date and award; your plan documents govern.
Our approach
A plan that follows the TI career arc
We read the public plan terms so the first meeting starts with your specifics: your hire date, your grant history, your ESPP lots, and, if it applies, your pension estimate. Then we build the structure in the order the decisions arrive.
Build the base
Capture the full 4% match, decide on the ESPP and what to do with shares after each purchase, and set a rule for the first RSU vest before it arrives.
Manage the overlap
With grants vesting every year and profit sharing near a fifth of base pay in recent years, we plan each year’s tax picture, deferred compensation elections if eligible, and how much TXN the household holds.
Time the exit
Model the retirement date against unvested equity, the Rule of 55, retiree medical cost, and, for legacy participants, the pension lump-sum-or-annuity election.
Turn it into income
Sequence withdrawals, options still vesting, Roth conversions in the low-income years before Social Security, and required distributions at 73 or 75.
The work
What you’ll work through with us
- An equity map: every grant, vest date, strike price, and ESPP lot in one schedule
- A written plan for RSU vests and option exercises, sized against concentration
- ESPP decisions: participation, holding periods, and the tax on each sale
- Profit-sharing and bonus cash flow: savings, deferral, and tax withholding
- Pension lump-sum versus annuity analysis, including survivor options
- Retirement-date modeling around 55 with 10 years of service
- Health coverage from retirement to Medicare
- Coordination with your CPA and estate attorney
Planning at the firm 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 TI employees
Are you affiliated with or endorsed by Texas Instruments?
No. The Financial Sciences Company is an independent, fee-only registered investment adviser. We are not affiliated with, endorsed by, or sponsored by Texas Instruments or its benefit plans. We work from TI’s public filings and, with your permission, your own plan statements.
Should I sell my RSUs when they vest?
There is no single answer. The value is taxed as ordinary income at vesting either way, so keeping the shares is economically similar to buying TXN at that day’s price. Some households hold for sound reasons; others diversify on a schedule. We size the decision against the rest of the balance sheet, not against a forecast for the stock.
What happens to my equity if I leave before I am retirement-eligible?
Under the award terms described in TI’s proxy, retirement eligibility is age 55 with 10 years of service, or age 65. In other departures, vested options generally remain exercisable for 30 days and unvested RSUs are cancelled. Confirm the terms of each award, since the gap between leaving at 54 and at 55 can be large.
I joined TI before December 1997. Should I take the pension as a lump sum?
It depends on the other income you will have, survivor needs, health, and the interest rates in effect when you elect, because lump sums are priced using IRS rates and shrink as rates rise. An annuity transfers longevity and market risk to the plan; a lump sum keeps flexibility and control. We model both before the election window opens.
Is the ESPP worth holding after purchase?
The 15% discount is income the day shares are bought. Holding past two years from the offering date and one year from purchase changes how the sale is taxed, but it also adds to company-stock exposure. Whether that trade makes sense depends on how much TXN the household already owns.
My role is affected by the 150mm fab closures. What should I review first?
Start with dates. Your age and years of service at separation affect unvested equity, the 401(k) Rule of 55, and pension timing if you are a legacy participant. Then map health coverage, the year’s tax picture, and any severance terms before signing.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Bring your grant history.
The first conversation is 30 minutes. A recent equity statement helps, but no preparation is needed.
Meet with usTexas Instruments and its logo are trademarks of Texas Instruments Incorporated. The Financial Sciences Company is an independent, fee-only registered investment adviser and is not affiliated with, endorsed by, or sponsored by Texas Instruments. Plan details summarized here come from public sources and may change; your plan documents govern.