Individuals

It's never too late to start saving for your retirement.

Use these resources to learn more and get started!

Take advantage of saving for retirement at work. If your employer offers a retirement benefit that you aren't taking advantage of, ask for more information today. The more time you have to let your money grow, the better off you'll be!

The most common type of retirement plan offered by employers are defined contribution plans -- such as 401(k)s, or 403(b)s for non-profits. 

Here are the basics of how defined contribution plans work:
  • You make contributions --an amount you elect-- from your paycheck
  • Your employer may choose to make contributions to your account (free money for your future!)
  • The money you save is adjusted for earnings and losses until you withdraw it
  • Your contributions (if they were pre-tax) and earnings are taxed when you withdraw the funds
  • If you withdraw your funds earlier than retirement age, you may have to pay a tax penalty
Your employer's retirement plan has important details about how taxes and withdrawals are handled. Ask questions so you can make decisions based on what's best for your situation.

Take advantage of the Saver's Credit. You may be eligible to receive a tax credit for making contributions to a retirement plan, for up to $2,000 for individuals, and up to $4,000 if married, filing jointly. The tax credit is based on a percentage of how much you contribute and your adjusted gross income. Consult your tax advisor to see if you qualify.

Get started today! Check out Resources for Individuals

How Individual Retirement Accounts Work
Like the name implies, IRAs are retirement savings accounts that individuals can set up. You don't need your employer to do it. IRAs are retirement accounts that offer tax advantages over other kinds of savings accounts. Some people who save for retirement in their employer's plan also save money in an IRA. Some people have only an IRA because they don't have access to a plan at work.

An IRA can be set up through a financial institution, insurance company, mutual fund or stockbroker. The most common types of IRAs are the Traditional and Roth IRA. Both types of accounts can invest in stocks, bonds, mutual funds and other investments and allow penalty-free withdrawals after age 59 ½. The difference between the two is how they are taxed.
 
Traditional IRA

  • Contributions may be tax deductible, depending on your income and whether your employer offers a retirement plan
  • You will pay taxes on your contributions and earnings when you withdraw your money
  • Possible penalty for withdrawals before age 59 ½
  • No income restrictions 
Roth IRA
  • Contributions are not tax deductible
  • No taxes on withdrawals and earnings, when conditions are satisfied
  • Possible penalty for withdrawals before age 59 ½
  • Certain income restrictions apply
These are just the highlights. Visit www.irs.gov/retirement-plans/traditional-and-roth-iras for more information on eligibility, annual contribution limits and taxation.

How to Contribute to Your IRA
You can put money in your IRA directly from payroll or your personal bank account. Saving for retirement through automatic deposit is the best way to ensure that you pay yourself first. Automatic deposit is when you set up a schedule so that a specific amount of money is automatically transferred from your bank account to your IRA on a regular basis.

Receive the Saver's Credit for Making Contributions
You may be eligible to receive a tax credit for making contributions to a retirement plan, for up to $2,000 for individuals, and up to $4,000 if married, filing jointly. The tax credit is based on a percentage of how much you contribute and your adjusted gross income. Consult your tax advisor to see if you qualify.

Get started today! Check out Resources for Individuals
 

Self-employed individuals have the ability to save for retirement on a tax-deferred basis as well.

Plans described below offer a high level overview of types of plans that may be available to self-employed individuals. These plans are subject to specific legal requirements and annual contribution limits.

What is a SEP-IRA?

  • If you're self-employed, a SEP-IRA allows you to set aside pre-tax income in a tax deferred savings account, meaning you do not pay taxes on your contribution today, and your earnings grow tax free. You can open a SEP-IRA at many financial institutions.

What is a Solo 401(k)?
  • Solo or individual 401(k) plans work much like a company 401(k) plan, and are meant for individuals who have no employees. Contributions can be either after-tax or pre-tax, meaning you can pay taxes on your contribution today, or choose to pay taxes when you withdraw the money at retirement. You can open a solo 401(k) at many financial institutions. 

What is a Simple IRA?
  • Simple IRA's are designed for the self-employed and businesses with 100 or fewer employees. The business owner can choose to match up to a certain percentage of the employees' contributions. Simple IRAs are great starter plans that encourage contributions from employees. 

Retirement Plans for Individuals
  • Of course, in addition to the types of plans listed above, self-employed people can also consider Individual Retirement Accounts (IRAs). More information about IRAs is in the section called About Individual Retirement Accounts (IRAs).
Learn more about self-employed retirement calculations www.irs.gov/retirement-plans/self-employed-individuals-calculating-your-own-retirement-plan-contribution-and-deduction

Get started today! Check out Resources for Individuals

 

The best time to start thinking about your retirement is before the boss does.

Source Unknown

Search on your own today!

How can you make the most of your retirement plan?

You can deposit to your retirement account directly from payroll or your personal bank account. Saving for retirement through automatic deposits is the best way to ensure that you pay yourself first. Ask your employer or IRA provider how you can set up an automatic contribution.

You may be eligible to receive a tax credit for putting money in a retirement plan, up to $2,000 for individuals and up to $4,000 if married, filing jointly. The tax credit is based on a percentage of how much you contribute and your adjusted gross income. Contact your tax advisor to see if you qualify.

Learn more at www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit

There's a lot to consider when calculating how much money you'll need for retirement. Retirement income comes from a variety of sources, including Social Security, retirement plan benefits, personal savings and assets, and earnings. Thankfully, there are simple online tools to make financial planning easier. Speak with a qualified financial advisor to make sure you are on track to meet your goals. 

Plan your future! Check out Resources for Individuals

As with any purchase, it's important to know what you are being charged for your retirement plan.  Even small fees may have a big impact over time.

There are generally two types of fees when it comes to investing - transactional and ongoing.

Transactional fees may apply at the time of a transaction. For example, a plan may charge an enrollment fee or, if you move your account balance from one retirement plan into a new plan, a rollover fee. In addition, a fund may have a sales charge that applies when you first invest in that fund.

Ongoing fees are typically charged to your retirement savings plan on a regular basis. For example, some plans have annual administration or management fees. 

Transactional and ongoing fees can affect how your savings grow over time. That's why it’s important to ask your retirement plan provider questions so you understand the fees that apply to your plan.

If you don’t know where to start, you can ask your provider: “What are all the fees related to my account?

Learn more about retirement plan fees and expenses by reading this publication from the US Department of Labor: Understanding Retirement Plan Fees and Expenses.

Visit Resources for Individuals for tools to help you compare the historical performance and current fees of different fund investment choices, and background information for different investment adviser firms and individual investment advisers. 

How much is enough for retirement?


We all know we should be saving for retirement, and that it's never too early --or too late-- to start.

But how much is enough? Watch this video to learn.

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1 (360) 725-5070

PO Box 42525
Olympia, WA 98504-2525

Retirement Marketplace

The Small Business Retirement Marketplace is administered by the Washington Department of Commerce as established in RCW Chapter 43.330.730-750. Plans carried on the Retirement Marketplace are verified by the Department of Financial Institutions and/or the Office of the Insurance Commissioner to meet the requirements set forth in RCW 43.330.732(7) and 735(6)(a). Enrollment in plans on the Retirement Marketplace is voluntary. Plan enrollment is managed by private financial services firms. Saving through certain plans will not be appropriate for all individuals. Employer facilitation of most retirement savings plans carries certain legal obligations for which employers are entirely responsible. Contributing to a retirement savings plan may offer tax benefits and/or consequences. Consult your tax or financial advisor with questions related to investments.