Apple RSUs
Apple RSUs are Restricted Stock Units your company grants you as part of an incentive to build company value. One Apple RSU’s value equals one share of Apple stock’s value and these units are released to you in chunks over time (‘vesting’) during employment. When one unit is released to you, you receive one share of company stock. Apple RSUs vest quarterly.
RSUs are taxed like your salary and wages (at ordinary tax rates). This income, and any tax withheld, is reported on your IRS Form W-2 in the year the Apple RSUs vest to you.
Federally, RSU income is withheld at a flat 22% until you reach $1M in stock compensation income in a calendar year and then switches to a 37% withholding rate. If you expect your effective tax rate to be higher, you will owe taxes at the end of the year on this RSU income (assuming no estimated tax payments were made during the year). State withholding varies by location.
For more information, check out our article Offer Letter Basics: RSUs
Apple offers target date funds, index tracking options and actively traded options. We are huge fans of Vanguard and we are so glad to see them included.
Apple offers employees the usual 401(k) contribution options and an after-tax 401(k) contribution option as well! This strategy is also known as “mega backdoor Roth” or “mega Roth conversion”. In essence, it enables you to make a large after-tax contribution to your 401(k) plan then convert to a Roth to grow tax-free over time. Although the after-tax 401(k) option may change with future legislation, it can be a great way to grow your retirement investments.
As always, please remember to review your beneficiary information annually to ensure it matches with your wishes!
Another way to consider augmenting your investments is through utilizing the discount available for purchasing company shares. We are big proponents of locking in the gain immediately since it is still a win. However, this may reduce cash flow significantly on a monthly basis to max it out. You should consider your current bandwidth and comfort level since your choice cannot be changed until the next enrollment period for the Apple ESPP plan.
Often, we like to link the Apple ESPP shares to a specific goal for funding. That way, each time you sell them they are getting you closer to that goal 🙂
How does it work? Similar to health insurance and physicians, small law offices contract with the group legal plan provider at specific rates to be able to work with you. Unlike health insurance, the network may or may not have many attorneys in your area or may not be of the value you hoped for. We recommend looking up reviews of other employees’ experiences before deciding whether to move forward with this plan.
Disclosure: Recommendations are of a general nature above and are not based on knowledge of any individual’s specific needs or circumstances. There is no intent to provide individual investment advisory, supervisory or management services.