Contributing

Most contribution rules apply to both your pre-tax 401(k) and Roth after-tax 401(k) account; the main difference is when you pay taxes. Take a look at some contribution guidelines. 

You can change your investment choices and level of contribution at any time. Investment changes will occur overnight at the end of the market trading day (4:00 p.m. ET). It may take one or two pay periods for a contribution change to take effect depending on the payroll cutoff date. Your contributions will be deducted from your paycheck. And, if you elect to save in both pre-tax and Roth after-tax accounts, the deductions will be taken from your paycheck at the same time.

You can make a separate contribution election for any merit bonus you receive (100%, up to IRS limits).

Your contribution level will automatically increase 2% each year (until you reach 20%) if the combined total of your pre-tax and Roth after-tax account is less than 20% of your regular pay. If it’s less than 6% of your regular pay, your pre-tax contribution rate will increase to 6% at the start of the following calendar year. You have the right to opt out during the December adjustment period or at any time during the year.

The automatic increase doesn’t apply if:

• You have opted out of the 401(k) Plan (you will be reenrolled each January at 6%)
• You have enrolled in Schwab Retirement Plan Services, Inc.’s voluntary automatic savings increase program

You can make additional after-tax (non-Roth) contributions of up to 100% of your eligible compensation, subject to IRS limits. You will pay federal and any applicable state income taxes on investment earnings for these funds when you withdraw them.

You can also roll over account balances from a prior employer’s qualified retirement plan into your Latham 401(k) Plan Account. Rollover instructions are on the form you need to complete here.

* For 2024, the SSWB is $168,600.

To be eligible for the partnership contribution, you must complete six months of service and have reached your entry date (the first day of the calendar month coinciding with or following your completion of six months of service). You must also be actively employed on the last day of the plan year (December 31) to receive the partnership contribution.

Partners are subject to different contribution requirements. See the Summary Plan Description for more details.

If you want to make voluntary after-tax contributions, be sure to also maximize your pre-tax and/or Roth after-tax contributions first because you will not receive the same tax advantages with voluntary after-tax contributions unless they are converted to a Roth account.

Converting voluntary after‐tax contributions to Roth savings through an In-Plan Roth Transfer is another way to build your tax-free retirement savings. Over time, this can add up to significant additional income in retirement because you will not need to pay taxes on any investment earnings you may have accumulated, as long as they are part of a qualified withdrawal: It has been at least five years from your first Roth contribution or In-Plan Roth Transfer (first Roth dollar) and you are age 59½ or over, disabled or deceased.

You can also convert any other type of contribution — pre-tax, partnership contributions, rollover contributions — but you will have to pay income taxes on the total amount converted to Roth.

To request an In-Plan Roth Transfer:

• First, save enough in your pre‐tax and/or Roth accounts to reach the IRS limits ($23,000 in 2024 or $30,500 if you are age 50 or older).
• Know you can save up to a maximum of $46,000 (associates and counsel only, staff maximum is less) in voluntary after‐tax contributions once you have met IRS limits.
• Call Schwab Participant Services at 1.800.724.7526 weekdays from 8 a.m. to 10 p.m. ET to begin steps to transfer your funds. Let them know you wish to convert your voluntary after-tax money to Roth after‐tax money. You can convert funds every payroll if you’d like.
• Pay taxes on any investment earnings from the voluntary after-tax contributions generated prior to the Roth transfer date. (You will receive an IRS Form 1099-R from Schwab in January following the year in which you make any conversions.)
• Satisfy the following requirements for a tax-free Roth distribution on any Roth In-Plan Conversions: Wait at least five years from your first Roth contribution or Roth In-Plan Conversion and after you are age 59½, disabled or deceased.

You can roll over account balances from a prior employer’s qualified retirement plan at any time by following a few simple steps. Contact your prior 401(k) recordkeeper to request a rollover and receive proper documentation including forms that Schwab will use for the rollover. Then, download this form, complete it and submit it to Schwab to complete the process.

Vesting, which means ownership of the money in your account, is the same for pre-tax and Roth after-tax accounts.

You are always 100% vested in your own contributions and any attributable earnings, including any rollover contributions you make to your 401(k) Plan account.

You are also immediately 100% vested in any partnership contributions made to your 401(k) Plan account.

Once you’ve chosen your contribution percentage and where to direct your investments, there are some things you can do to keep your 401(k) on track.

Your 401(k) savings are an important part of your financial picture. It is smart to log on to Schwab or download the Schwab app to check:

• Your account balance to be sure your designated contributions are being made and that they are going to your designated investment(s).

• Your beneficiaries, so your account balance will go to the right person(s) in case of your death.

• Your contribution percentage levels. Your circumstances change over time, and it is a good idea to be sure you are contributing as much as you can or are comfortable with.

• Your investments. Be sure your risk level is appropriate based on your appetite for risk and life circumstances. For instance, as you get closer to retirement, you may want to consider a more conservative investment approach to protect your wealth. When you are younger and have several years before your retirement, you might take a more aggressive approach to investing.

Some good times to check your account are when you get a pay raise or your financial situation changes, like when you add a new family member or when your children no longer live in your home. Also, you may want to evaluate your savings rate as you begin thinking about your retirement date.

You can make changes to your contribution level and investment choices at any time.

Go to workplace.schwab.com or call 1.800.724.7526.