Schwab Contributions Decoder Ring

Introduction#

This might be very plan and company specific, but my company uses Charles Schwab for our 401k. In general, I'm a Schwab fan. Heck, I've even worked for them, but there are a few places they could use some help.

  • Their UI often earns the harshest criticism I can ever level at a UI; It looks like something I could design.
  • Their descriptions of options is unnecessarily confusing.

Now, I suspect this is a combination of what my company has given them and how they've implemented it, so I have no idea if this is a problem across their whole ecosystem, but I'm tired of explaining it, so I'm just going to document it for everyone.

note

Even though this might be company specific, I'm putting it out here so that people can have access to the information when they aren't on the company intranet.

Base Pay#

Real MeaningSchwab Description
Traditional 401kEmployee Pre Tax Account
Roth 401kEmployee Roth 401k
After-taxAfter-Tax Account
Traditional 401k (catchup for people over 50)EE Catch Up Pre Tax Acct
Roth 401k catchup (for people over 50)Employee Catch-Up Roth 401k

Bonus Pay#

Bonus has two portions.

  • Annual Incentive Plan (i.e. company bonus)
  • Other bonus (sales, spot awards, etc.)

Most of us are on the AIP so that has the most relevance, but if you get bonuses (sales, spot awards, etc) then the "Bonus" section applies. AIP is the (currently) February bonus payout.

Annual Incentive Plan (AIP)#

Real MeaningSchwab Description
Traditional 401kAIP Pre-Tax
Roth 401kAIP Roth
After-taxAIP After-Tax Account
Traditional 401k (catchup for people over 50)AIP Pre-Tax Catch-Up
Roth 401k catchup (for people over 50)AIP Roth Catch-Up

Bonus#

Real MeaningSchwab Description
Traditional 401kEmployee Bonus Pre Tax Account
Roth 401kEmployee Bonus Roth 401(K)
After-taxAfter-Tax Bonus Account
Traditional 401k (catchup for people over 50)EE Bonus Catch Up Pre Tax Acct
Roth 401k catchup (for people over 50)EE Bonus Catch Up Roth 401k