How We Serve
Apple Employees
A clear, goals-based financial plan designed around
your equity compensation (Apple RSU & Apple ESPP)
Taking Your Salary and Compensation
Structure Into Consideration
We're here to help you make educated financial decisions based on your
options as an Apple employee.
As an Apple employee, you have a lot of benefits, options, and opportunities. What is right for one of your colleagues may not be right for you. Work with an experienced CFP® Professional that will help you navigate and leverage your benefits and develop a comprehensive custom plan that prioritizes your goals, objectives, and life stage.
How We Can Help
We have the expertise to help you strategically navigate your Apple equity options
Apple 401K
RSU
ESPP
DCP
Insurance
Apple 401(K) Options
Match
Roth 401(K)
After-tax 401(K)
Mega Back Door Roth
Custom Strategies
The Apple 401k match offering is tiered and based on how long you have been with the company and your seniority
0-2 Years: 50% matching for every dollar contributed up to 3-6% of your eligible pay based on seniority
2-5 years: 75% matching for every dollar contributed up to 3-6% of your eligible pay based on seniority
5 years: 100% matching for every dollar contributed up 3-6% of your eligible pay based on seniority
For 2023, the limit is $22,500, and if you are 50 or over you are eligible for an additional “catch-up” contribution of $7,500. You are fully vested on day one.
Apple’s 401k has a Roth 401k option. You can contribute the same $22,500 for 2023, but you do not get a tax reduction in your current year. Instead, the Roth 401k allows those earnings to grow tax deferred and offers tax-free withdrawals, when planned correctly, in retirement (59.5+ years old). You still receive the same Apple 401k match based on the above schedule on your Roth 401k contributions.
Note: Contributing to Apple’s pre-tax 401k vs. Apple’s Roth 401 depends on your unique situation. The saying “You will be in a lower tax bracket when you retire.” is not always true. You also do not know what the tax codes and tax brackets will be when you retire.
The limit for total 401k contributions in 2023 is $66,000 (not including “catch-up”). Apple allows you to contribute an additional 20% of your base pay after tax. Starting with the $66,000 limit – your employee contributions – Apple’s match = the max you can contribute after-tax, keeping in mind that you are also limited to 20% of your base pay.
After-tax money grows on a tax-deferred basis until retirement. When taking a distribution in retirement, the contributions can be withdrawn tax-free, but the earnings are considered taxable ordinary income when withdrawn.
Note: The Apple 401k has an amazing feature called “Mega Backdoor Roth” which is not offered in all 401k plans. Refer to the next option for details.
The Apple 401k Mega Backdoor Roth works along with the after-tax 401k option. The limit for total 401k contributions in 2023 is $66,000 (not including “catch-up”). Starting with the $66,000 limit – your employee contributions – the Apple 401k match = the max you can contribute after-tax, keeping in mind that you are also limited to 20% of your base pay, and unlike the Roth401k, this option does not have income limits.
Example: Personal 401k contributions $22,500 (not including “catch-up”) + Apple 401k Match based on tenure and compensation + After-tax contributions = $66,000.
However, instead of stopping there and leaving it in the after-tax, it gets converted to the Roth 401k side. Meaning that your contributions AND the earnings will be withdrawn tax-free in retirement.
Note: Unlike other employers who offer this strategy, the Apple Mega Backdoor Roth does not provide a streamlined process that can be activated one time. Instead, you need to go through this process every 2 weeks. This inconvenience often leads to converting less frequently and can cause small unexpected tax liabilities.
Should you contribute to the ApplePre-tax 401k vs. the Apple Roth 401k? Should you max out your Apple Mega Backdoor Roth? Should you max out my Apple ESPP? These are all great questions, and the simple answer is “It Depends”. In addition, the answer can change over time as your household situation and goals change.
Note: Depending on your position you may be subject to trading windows, making a 10b5-1 trading plan a valid option.
Restricted stock units (RSU)
What This Means
Our Insights
There are several types of Apple RSU Awards you will receive as an Apple Employee. On-hire Stock Awards: This will be part of your hiring package at Apple. The Apple RSU vesting schedule will be determined when you are hired. They typically vest 12.5% every six months starting one year after the hire date.
Stock Refreshers: These Apple RSUs are based on a 5 to 9 performance scale, and are awarded once per year with the same vesting schedule as on-hire stock awards.
Out-of-cycle Bonuses: These are given to employees who exceed expectations or are in management-level roles. We have also seen these used as an employee retention tool for high-performing employees who have the potential to be targeted by competitors.
Think of RSUs as a form of cash flow in your financial plan, goals, and investment strategy. Upon each vesting you have many different options: continue to hold, diversify to other investments, contribute to a college 529 plan, go on vacation, make charitable contributions, buy real estate, etc. The possibilities are endless and the right strategy varies based on your unique situation. What ends up hurting people the most is not having a financial plan and investment strategy in place ahead of time, which leads to inconsistent and emotional decision-making.
When your Apple RSUs vest, they are taxed at your income rate. However, in many cases, by default, sell-to-cover elections mean 22% are sold to cover federal taxes. This can be significantly lower than your tax bracket, causing surprise tax bills. The higher your position at Apple, the more of your total compensation is tied to RSUs, requiring custom planning and investment strategies
Employee stock purchase plan (ESPP)
What This Means
Our Insights
Apple employees have a great opportunity to purchase Apple stock at a 15% discount with the Apple ESPP. This plan is even more appealing compared to other company ESPP plans because Apple has a lookback provision. The two offering periods are February 1st to July 31st and August 1st to January 31st. The lookback provision takes the stock price at either the beginning or the end of the 6-month offering period, whichever is lower, giving employees the opportunity to enjoy gains above 15%. The maximum contribution limit is $25,000 or 10% of base pay annually, whichever is less.
Learn More About ESPPs
Taxes: ESPPs have different tax treatments (qualifying disposition and disqualifying disposition) depending on the time held from the purchase date as well as the time held since the initial offering date.
Cash Flow: The number one reason we hear about people not participating is due to household cash flow. In many cases this can be built into your custom financial planning, ensuring you are capitalizing on the $2,370yr benefit!
Over Weight Allocation to Apple Stock: Between Apple RSUs and Apple ESPP, it is very easy for your portfolio to become overweighted with Apple stock. We work heavily with people who t have high single-stock concentrated portfolios.
Apple Deferred Compensation Plans (DCP)
What This Means
Our Insights
The Apple DCP is available for only certainApple employees. It allows you to defer some of your taxable income to a later date. Contributions to the Apple DCP are tax deductible, invested, and then when you withdraw at a later date taxed. The general idea is to defer taxes in high-income years, and distribute during lower-income tax years, while also investing the funds.
There are important dates to be aware of making it much more important to have a custom financial plan and investment strategy. Such as enrollment period for salary deferment, enrollment period of Bonus Deferment, and types of elections/timing for distributions
It is important to keep your individual risk tolerance and Apple’s credit risk in mind when considering the Apple DCP
Insurance
Health
Life
Disability
Flexible Spending Account (FSA)
Perks+
Apple employees are offered two main types of plans: traditional style health plans and health savings account (HSA) if enrolled in a high-deductible health plan (HDHP).
The HSA is a triple tax-advantaged account and offers pre-tax contributions, tax-deferred growth, and tax-free withdrawals as long as they are used for qualified medical purchases. The 2023 limit is $3,850 for individuals and $7,750 for families. Apple will contribute $750 on your behalf.
Apple offers employee life insurance coverage with different options. This is age-based and non-portable. Depending on your situation, a private-term policy may be a better option.
Apple employees receive some coverage for short-term and long-term disability. Depending on your situation and compensation, purchasing supplemental coverage to account for more of your income may be a good option.
You can contribute up to $3,050 for many out-of-pocket medical expenses with tax-free dollars. If you are expecting a large expense for the year (e.g. Braces) or have qualified recurring expenses, this can be a great tool to use. Keep in mind you can only roll over $610 into the following year
Apple employees receive many discounts and perks such as discounts on Apple products, tuitions reimbursement up to $5,250 per year, transportation, donation matching, and more.
Frequently Asked
Questions
What type of Apple Employees do you work with?
We work with Apple Employees with at least $500,000 in investible assets who are wanting a long-term relationship with custom financial/retirement planning and asset management. Because of the level of holistic custom strategies and goals, we do not accept one-off transactional clients.
What does it mean to be an independent investment fiduciary?
We are not tied to any firm’s proprietary investment products and engage in no investment banking activities, which means our research and market insights are independent and we are free to recommend any investments that will help you pursue your financial goals.
Can you work with clients remotely?
Yes, we work with clients across the country and have many clients who have never set foot in our office. We implement robust technology for a seamless virtual client experience.
This information is designed to be educational only, and does not constitute financial advice. Atkinson Wealth Strategies is not affiliated with Apple. While Atkinson Wealth Strategies communicates with its clients regarding their Apple employee benefits, and provides education on Apple’s Benefits, there is no guarantee that the information provided is accurate or up-to-date. Apple employees should rely on their employer for the most up-to-date information on their benefits, and for answers to any questions regarding their specific situation. There is no guarantee as to the current accuracy of, nor liability for, decisions based on such information and it should not be relied on as such.
