The $165,000 Retirement Bombshell: Why Washington's Public Employees Must Act Now or Risk Their Retirement Years

Imagine this: After decades of serving your community, you're finally ready to retire. You've got plans – maybe travel, spend time with grandkids, or pursue a new hobby. But there's a ticking time bomb in your retirement plan that could blow it all up.

The Shocking Truth About Retirement Healthcare Costs
Hold onto your hat, because this might knock you off your feet: An average 65-year-old retiring in 2024 will need a whopping $165,000 just for healthcare costs1. That's not a typo – $165,000!
For Washington's public servants, this isn't just a number. It's a potential catastrophe waiting to happen.

Why Your Pension Benefits Might Not Be Enough (And What You Can Do About It)
You've worked hard. You've paid your dues. You've got your pension benefits. But here's the cold, hard truth: It might not be enough.
Here's what you need to know:

1. Medicare is Just the Beginning: Sure, you'll have Medicare at 65. But it's not the cure-all you might think. There are gaps – big ones.
2. PEBB is Good, But...: The Public Employees Benefits Board (PEBB) Program offers retiree health insurance2. It's a great start, but it's not the whole picture.
3. Long-Term Care Could Wipe You Out: In Washington, a private room in a nursing home averages $164,250 per year3. Let that sink in.
4. Inflation is the Silent Killer: Healthcare costs are rising about 5% every year4. Your retirement savings need to keep up.

The Hidden Gaps in Your State Benefits
As a Washington State employee, you have access to benefits that many others don't. But are they enough?

• Pension: Yes, it's a solid foundation. But have you factored in the rising costs of healthcare?
• Deferred Compensation Program (DCP): A great way to save extra, but are you maximizing it?
• PEBB Coverage: Valuable, but premiums can be substantial, especially if you retire before 65.

The bottom line? Your state benefits are valuable, but they're not a silver bullet for retirement healthcare costs.

5 Urgent Steps Every Washington Public Servant Must Take Now

1. Maximize Your HSA: If eligible, this triple-tax-advantaged account is your secret weapon5.
2. Consider Long-Term Care Insurance: The younger you are, the cheaper it is; however, it may not be enough. Also, consider “self-insuring” by allocating a portion of savings to long-term care.
3. Supercharge Your Deferred Comp: Your DCP could be the key to bridging the healthcare cost gap. Here's why:
   • Tax-deferred growth: Your money grows faster when Uncle Sam isn't taking a bite each year.
   • Higher contribution limits: In 2024, you can stash away up to $23,000 (or $30,500 if you're 50 or older)6.
   • Flexible withdrawals: Unlike other retirement accounts, there's no penalty for withdrawals before age 59½ if you've left your job. Withdrawals are still subject to income tax!
   • Diverse investment options: Tailor your portfolio to your risk tolerance and timeline.
4. Explore All PEBB Options: Including Medicare Advantage plans.
5. Stay Healthy: It sounds simple, but it's your best defense against spiraling healthcare costs.

Don't Let Your Retirement Dreams Fade Away
You've spent your career serving others. Now it's time to secure your own future.

Download Your Free Comprehensive DCP Guide Now
Every day you delay savings could impact your retirement readiness. Our in-depth Deferred Compensation Program (DCP) Guide is your roadmap to maximizing this powerful retirement savings tool. Here's what you'll discover:

• A clear explanation of DCP fundamentals, from enrollment to investment options
• Strategies for choosing between pre-tax and Roth contributions
• Insights on maximizing your contributions and optimizing investment choices
• Case studies of early career savers, mid-career optimizers, and near-retirees
• Expert tips on accessing your funds and planning for retirement
• Answers to common misconceptions and frequently asked questions

Download Your Free DCP Guide

​Remember, understanding your DCP is crucial for a secure retirement. Whether you're just starting your public service career or nearing retirement, this guide offers valuable insights for every stage. Don't leave your financial future to chance. Download the guide now and take the first step towards a more secure retirement!
Footnotes

1. Fidelity Investments. (2024). "How to plan for rising health care costs." https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs ↩
2. Washington State Health Care Authority. (2024). "Retiree insurance." https://www.hca.wa.gov/employee-retiree-benefits/retirees ↩
3. Genworth. (2024). "Cost of Care Survey." https://www.genworth.com/aging-and-you/finances/cost-of-care.html ↩
4. HealthView Services. (2022). "2022 Retirement Healthcare Costs Data Report." https://hvsfinancial.com/wp-content/uploads/2022/03/HVS-Data-Report-Brief-0312222.pdf ↩
5. Internal Revenue Service. (2024). "Health Savings Accounts and Other Tax-Favored Health Plans." https://www.irs.gov/publications/p969 ↩
6. Washington State Department of Retirement Systems. (2024). "Deferred Compensation Program (DCP)." https://www.drs.wa.gov/dcp/ ↩

 

-Seth Deal