Free Washington Retirement Planning Community and CoursesWashington State Plan 3 is one of the most misunderstood retirement systems, part pension, part investment account. In this episode, we break down the real pros and cons of Plan 3 so you understand how it works, what it does well, and where it can fall short if you’re not careful.

You’ll learn why Plan 3’s 1% per year pension is still a valuable guaranteed benefit (and completely free), how the forced savings component helps many employees retire with more money than they otherwise would, and why Plan 3 pensions continue to grow by 3% per year even if you leave service early after 20 years.

We also cover the investment side, including contribution limits, default funds, target-date funds, and why many Plan 3 portfolios underperform compared to private retirement accounts. Then we explain the biggest downside: only half of your retirement income is guaranteed, while the other half depends on the market, timing, and sequence of returns.

In the second half, we answer a common listener question:

Can you access Plan 3 (401(a)) and Deferred Comp (457) after separating from service without penalties?

We walk through the Rule of 55, how Deferred Comp works differently, and a critical mistake people make when contributing to multiple 457 plans.

If you’re in PERS 3, TRS 3, or SERS 3, this episode will help you decide how to manage risk, income, and flexibility in retirement.

00:00 - What Plan 3 is and who it applies to

01:23 - Pro #1: 1% per year guaranteed pension (free benefit)

02:01 - Pro #2: Forced savings and long-term account growth

02:58 - Pension growth after leaving service early (3% per year)

03:52 - Using Plan 3 money for TAP annuities

04:27 - Con #1: You cannot change your contribution rate

04:59 - Con #2: Investment limitations and default fund risks

06:39 - Why Plan 3 portfolios often underperform private accounts

07:21 - Con #3: Only half your retirement income is guaranteed

08:40 - Why market volatility affects retirement income

09:12 - Listener Q&A: Accessing Plan 3 and Deferred Comp penalty-free

10:30 - Rule of 55 for Plan 3 explained

11:09 - Deferred Comp (457): No penalty after separation, any age

11:53 - Critical warning: Multiple 457 plans share one contribution limitLinks:

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community and CoursesPlan 2 is one of the most generous pension systems in the country, but it’s not perfect. In this episode, we break down the real pros and cons of Plan 2 for Washington State teachers, public employees, and school employees so you can understand what you’re gaining, and what you may be missing.

We explain why Plan 2’s 2% per year lifetime pension is such a powerful benefit, how vesting works after just five years, and why many Plan 2 retirees actually earn more guaranteed income than Plan 3 members who saved aggressively on their own. You’ll also learn about lesser-known features like the 5.5% interest credit on contributions after separation.

Then we cover the downsides:

- No built-in savings account

- Rising mandatory contribution rates

- Limited liquidity and legacy concerns

- What happens if you pass away early in retirement

In the second half of the episode, we answer a critical listener question about survivorship benefits and community property rules. We explain why spouses do not automatically receive a pension unless the correct survivorship option is selected, and why this decision is permanent.

If you’re in PERS 2, TRS 2, or SERS 2, this episode will help you avoid costly retirement mistakes and make smarter planning decisions.

00:00 - Intro - Plan 2 for WA State Employees

01:32 - The biggest advantage: 2% per year lifetime pension

02:29 - Why income matters more than account balances

03:32 - Low required contributions vs private retirement savings

04:04 - Vesting after just 5 years

04:26 - Little-known benefit: 5.5% interest on contributions after separation

05:24 - The biggest downside: no built-in savings account

06:01 - Mandatory contributions and why you have no control

06:54 - Liquidity and legacy concerns with Plan 2

07:17 - What happens if you pass away early in retirement

08:13 - Listener question: survivorship benefits and community property

08:32 - Pension option choices and why they are permanent

09:09 - Why spouses must sign and notarize Option 1

10:16 - Real example: how Option 1 can financially devastate a survivor

11:56 - Why survivorship options often break even faster than expected

12:26 - Why this is one of the most important retirement decisions you’ll make

Links:

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community and CoursesIf your income is too high to contribute to a Roth IRA, you’re not out of options, especially if you’re a Washington State employee.

In this episode of the Washington Retirement Planning Podcast, we break down three proven ways to continue building tax-free Roth income, even after you’ve passed the Roth IRA income limits. We also explain why some commonly recommended strategies, like backdoor Roth IRAs are often overused, misunderstood, and sometimes done incorrectly.

You’ll learn how Roth options inside Deferred Comp (457), 403(b), and employer plans work, why they have no income limits, and how recent Secure Act changes created powerful new catch-up opportunities for ages 50–63. We also walk through Roth conversions, when they make sense, how to avoid IRS penalties, and why paying taxes the wrong way can cost you extra.

Finally, we cover backdoor Roth IRAs: what they are, when they actually make sense, and the critical tax form (Form 8606) that people forget to file, often leading to penalties years later.

The second half of the episode answers a listener's question about Plan 3 annuity options, comparing private annuities versus Washington State options like service credit purchases, TERS annuities, and the TAP annuity, including why the guaranteed 3% COLA makes TAP so powerful for early retirement planning.

If you’re a high-income earner trying to reduce future taxes and retire earlier, this episode is a must-watch.

00:00 - Why high earners get shut out of Roth IRAs

01:32 - 2025 Roth IRA income limits and phaseout ranges

02:53 - Best option #1: Roth Deferred Comp (no income limits)

04:05 - New Secure Act catch-up rules (ages 50–63)

05:16 - Option #2: Roth conversions and when they make sense

06:39 - How to pay Roth conversion taxes correctly (avoid penalties)

08:11 - Option #3: Backdoor Roth IRA explained (and common mistakes)

10:42 - Pro-rata rule and Form 8606 warning

14:55 - Listener Q&A: Plan 3 annuity options explained

20:22 - TAP annuity vs service credits vs TERS annuity

23:40 - Using annuities strategically to retire earlier

Links:

1. Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community and Courses

Retiring from a Washington State school district can feel overwhelming, including forms to submit, when to notify HR, how to pick your retirement date, and how your healthcare and pension will transition. In this episode, we walk you through the 7 essential steps every school district employee must take before retiring.

You’ll learn how to build your written financial plan, when to notify your district to receive potential early-notice incentives, how to request and verify your pension estimate, and how to correctly set your separation date vs. retirement date (including the major impact this has on COLAs and healthcare).

We also explain how PEBB healthcare works before and after age 65, when to apply for Social Security, and what to do with your Plan 3, DCP, or 403(b) savings once you separate from service.

Finally, we answer the Question of the Day: Can someone with service in both PERS and LEOFF retire at age 53 with no penalties? The transcript gives a clear breakdown of how the rules differ between the systems and how early-retirement reductions really work.

Suppose you are planning to retire at the end of the school year or within the next few years. This is one of the most important episodes you’ll watch.

00:00 – Introduction and today’s topic: 7 steps to retire from a school district

01:19 – Step 1: Create your written financial plan (income, expenses, longevity, LTC)

02:43 – Step 2: Notify your district by February; early-notice bonuses up to $1,500

03:07 – Step 3: Request & verify your pension estimate (top-5 years, missing income errors)

04:36 – Step 4: Apply for retirement online or via paper; key dates that affect COLA & healthcare

05:27 – Why most retirees pick June 30 (separation) + July 1 (retirement)

07:02 – Alternative: September 1 start date to keep SEBB longer + earn more service credit

07:39 – Step 5: Set up PEBB healthcare (pre-65 vs. Medicare supplement options)

09:01 – Step 6: When to apply for Social Security (timing, earnings test, avoiding mistakes)

10:30 – Step 7: What to do with your retirement savings (Plan 3, DCP, 403(b), IRA, annuity)

11:41 – Reminder: Taxes and RMDs at 72; planning matters

12:20 – Question of the Day: PERS vs. LEOFF early-retirement rules

14:08 – Why early retirement penalties are often misunderstood (and usually small)

16:29 – Real client stories: retirees leaving 2+ years earlier than expected

18:42 – Free course, community, and how to get help with your retirement plan

Links:

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community⁠⁠⁠

In this episode, we tackle one of the most common retirement questions:

“Should I use my retirement funds to pay off my debt?”

While paying off debt feels good, pulling large sums from your 403(b), 457, IRA, or annuity can create massive tax consequences, penalties, and long-term setbacks, especially for Washington State employees who rely heavily on their savings to supplement their pension.

We break down:

1. When using retirement funds might make sense

2. The hidden tax traps that come with large withdrawals

3. Why paying off your home with retirement money can be a six-figure mistake

4. The danger of wiping out savings to buy vehicles or eliminate loans

5. How small, strategic withdrawals differ from big lump-sum mistakes

6. Why “all you’ve saved is all you’ll ever have” in retirement

Then we shift to the question of the day:

How will Washington handle the new Secure Act 2.0 Roth catch-up requirement for high earners starting in 2026? We cover who’s affected, how DCP/403(b)/457 plans may adjust, and what employees should prepare for now.

If you're thinking about paying off loans before retirement, or if you earn over $145,000 and want to understand the new Roth rules, this episode is essential listening.

00:00 - Should you use retirement funds to pay off debt?

00:34 - Question of the day

01:20 - The tax consequences people often overlook

02:57 - Paying off your house: the six-figure opportunity cost

04:08 - Taxes, penalties, and the slippery slope of withdrawals

05:00 - When using retirement money might make sense

05:53 - The importance of strategic, small withdrawals

06:43 - Why protecting future savings matters in retirement

07:38 - Question of the day: Secure Act 2.0 Roth catch-up rules

09:19 - How Washington might implement mandatory Roth catch-ups

09:48 - What high-income DCP/403(b)/457 contributors should prepare for

10:55 - Join the free community for updates and training

Links:

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

In this episode, we tackle two of the most important retirement planning concepts: the Rule of 4% and the sequence of returns risk. We break down what the traditional 4% withdrawal rule means, why it’s outdated in today’s markets, and how following it blindly could actually hurt our retirement security.

We explore how the order of market gains and losses can dramatically impact our savings once we begin withdrawing money, even if long-term averages look solid. Using examples from the S&P 500, we show how early negative years can devastate retirement portfolios, while exploring alternatives like index annuities to help reduce risk.

Then we shift into a listener question about Roth 457 (deferred comp) plans: Can we withdraw funds early without penalties? We walk through the rules around contributions, growth, the five-year requirement, and how withdrawals are sequenced so we can make informed decisions.

If we’ve ever wondered whether the Rule of 4% still works, how to protect our retirement from bad timing, or how Roth 457 withdrawals really function, this episode will give us clarity and confidence.

00:00 – Intro

01:00 – Why timing of returns matters in retirement

02:39 – Example: S&P 500 returns 2000-2018

03:37 – Impact of order of returns (no withdrawals)

04:50 – The 4% Rule explained & its origins

05:31 – Why the 4% Rule no longer works reliably

06:42 – Withdrawals + negative years = compounded losses

07:56 – Using index annuities to reduce market risk

09:49 – Pros & cons of protected strategies

11:20 – TAP annuity: unique Washington benefit

12:29 – Comparing TAP annuity vs portfolio withdrawals

13:56 – Managing withdrawals: why strategy matters

15:07 – Listener Q&A: Roth 457 withdrawal rules

15:43 – Contributions vs growth: what we can withdraw

16:32 – The 5-year and age 59½ rules explained

17:15 – Withdrawal sequencing: contributions → conversions → growth

Links:

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

In this episode, we break down a strategy that sounds almost too good to be true: investing with little to no risk and no fees. We revisit index annuities: how they work, where they shine, and where they fall short after years of testing them with clients. We also explore more modern tools like buffer ETFs and structured notes, which offer market participation with built-in protection, but come with trade-offs such as caps and costs.

We compare how these strategies perform against traditional investments like the S&P 500, and what it really means when we trade some growth potential for downside protection. By the end, we highlight when these products can make sense and when we might be better off with other options.

Finally, we answer today’s listener question: Would purchasing service credits or annuities help us retire early? We dig into what service credit annuities really are, the trade-offs of converting liquid assets into guaranteed income, and why these decisions need to be made as part of a bigger financial plan, not in isolation.

If we’ve ever wondered how to protect our money, minimize fees, and still retire earlier with confidence, this is the episode for us.

00:00 – Intro

00:28 – Strategy: invest with no risk and no fees

02:05 – Historical performance example (2000–2018)

02:45 – Gains capture: trading upside for protection

04:10 – Real returns after fees

05:21 – How my perspective on annuities has changed

05:49 – Buffer ETFs explained: protection with liquidity

06:29 – Example: $10K buffer ETF with 10% protection

08:15 – Caps, growth limits, and trade-offs

09:01 – Why buffer ETFs are expensive

09:35 – Structured notes & index CDs as alternatives

10:22 – Custom contracts and where they fit

11:30 – Listener question: should we buy service credits or annuities?

12:00 – How annuities convert assets into guaranteed income

12:18 – Liquidity trade-offs & timing restrictions

13:38 – Why decisions must fit into a full financial plan

15:05 – Washington Wealth Breakthrough Group

Links:

1. Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community and CoursesIn this episode, we dive deep into the world of investment fees: what they are, how they stack up over time, and why understanding them is so important for our long-term wealth. We explore the different layers of fees, from recordkeeping costs to advisor fees, and discuss how they can significantly impact our net worth if we don’t pay attention.We also break down the true value of financial advisors. Are their fees worth it? How do different fee models, percentage of assets, hourly, and flat fees compare in real life? By looking at real examples, we see how fees can eat into returns, but also how the right guidance can prevent costly mistakes, save us stress, and help us build wealth more effectively.Finally, we tackle a key listener question: Is it wise to separate from a school district if we can’t collect retirement benefits until age 62? We run the numbers and weigh the pros and cons of taking benefits early versus waiting. Spoiler: the difference might surprise you, and it could mean the freedom to retire earlier than expected.If we want to understand our fees, maximize our retirement benefits, and avoid costly mistakes, this episode is a must-listen.00:00 – Intro00:19 – Why investment fees matter02:35 – The first layer of fees: recordkeeping costs03:38 – The second layer: fund management fees04:00 – The third layer: advisor fees & AUM structures05:25 – Advisor fees vs. internal fund costs05:59 – $500K example: the long-term impact of fees07:06 – When advisor fees are worth it08:45 – Big firms vs. comprehensive planning09:35 – Why tax planning must be part of the service12:17 – Different advisor fee models: AUM, hourly, flat fees15:09 – Flat fees vs. percentage-based fees16:47 – Key takeaways on fee structures17:03 – Listener question: separating from a school district before retirement18:14 – Comparing benefits at 60 vs. 6219:22 – Why early retirement can make sense21:15 – Washington Wealth Breakthrough Group

Links:

1. ⁠⁠Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

Free Washington Retirement Planning Community⁠⁠

In this episode of the Washington Retirement Planning Podcast, we break down one of the most common misconceptions in retirement planning: average rates of return. You’ll learn why averages don’t always reflect your real investment growth, how market fluctuations can distort results, and what truly matters when reviewing your portfolio.

We’ll also tackle a key listener question: How does retiring early affect your pension benefits? We’ll go over reduction rules, penalties vs. “reduced benefits,” and strategies for separating from service without turning on your pension too soon. If you’re planning for retirement in Washington State, or just want to understand how real returns and pensions work, this episode is for you.

0:00 – Intro & episode overview

0:28 – Average vs. real returns explained

0:47 – Context: $100,000 starting balance & S&P timeline

2:17 – Why a positive average return can still mean losing money

3:27 – Example: 4-year scenario showing misleading averages

4:27 – Applying this to the S&P 500 (2000–2018)

6:07 – Why real return matters more than average return

6:23 – Question of the day: early retirement & pension benefits

7:22 – “Penalties” vs. “reduced benefits” in pensions & Social Security

8:28 – Comparing pension reductions to Social Security

9:23 – How early retirement penalties add up

10:21 – Separating from service vs. retiring

10:59 – Breaking even with early retirement strategies

11:20 – WA Retirement Breakthrough

11:42 – Final thoughts & sharing with new teachers

Links:

1. Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠

⁠Free Washington Retirement Planning Community⁠⁠⁠In this podcast episode, we talk about four important things many financial advisors often won’t tell you - and then answer the question everyone asks: “How much is enough to retire?” We cover why swapping bonds for certain annuities can reduce downside risk, the massive financial impact of long-term care, the long-term tax exposure in pretax accounts (and the idea of Roth conversions), and why not all advisors are trained in retirement-income planning.After those four “secrets,” we walk through a practical approach to calculating your retirement needs: track actual spending, separate fixed vs. variable expenses, factor in guaranteed income (pension + Social Security), and consider TAP/state annuities to cover shortfalls. You’ll also hear a working withdrawal guideline (used here: ~5%) and real examples to help turn abstract percentages into usable monthly numbers.The episode also touches on how to adjust withdrawal rates based on life stage, why managing your own portfolio can be surprisingly time-consuming, and how annuity payout rates compare to market-based withdrawals. The host wraps up with details on a free online community and how to book a consultation.0:00 - Intro2:17 - 1) Annuities as bond replacements - performance & risk reduction3:12 - 2) Long-term care - 70% likelihood and the cost risk to retirement funds4:16 - 3) Taxes - long-term tax exposure and why Roth/tax planning matters5:52 - 4) Advisor expertise - many advisors aren’t specialists in retirement-income planning7:09 - Question of the day: “How much is enough?” - track spending; fixed vs. variable expenses9:01 - Using TAP/state annuity to cover guaranteed-expense shortfalls12:01 - Withdrawal approach (practical ~5% rule), Vanguard findings & time commitment for DIY investors16:29 - TAP payout rates and Plan 2 vs. Plan 3 differences (cost-of-living adjustments explained)Links:

1. Free Washington Retirement Planning Community⁠⁠

2. ⁠Plan 3 Investment Advice⁠

3. ⁠Schedule Meeting⁠

4. More free resources at ⁠WATRSPERS.com⁠