Hi everyone! Washington Saves (the new state mandated retirement program) is here and most construction companies I talk with haven't heard about it yet so I'm spreading the word. Starting July 1, 2027, most employers who've been operating for at least two years and don't already offer a qualifying retirement plan will be required to either enroll their team in the state's auto-IRA program (Washington Saves) or offer a company plan that meets the mandate.
A quick side-by-side for us financial minded people:
The state auto-IRA caps employee contributions at $7,500/year (2026). Employers can't contribute so there's no tax planning opportunities for the business-it's purely a payroll-deduction IRA. So while there is no cost, your HR/Payroll staff will still have the administrative burden of remitting payroll deferrals each pay period.
A standalone 401(k) changes the math:
- $24,500 - $35,750 in employee deferrals (owners included) - w/ total contributions of up to $83,250 per account (for 2026)
- Plan design (vesting schedules, profit-sharing formulas, Roth, loans) can be built around your owners, key people and retention goals
- Deductible expenses - SECURE Act 2.0 created start-up plan credits of up to $5,000/yr for the first 3 years to offset costs of implementing a plan. Costs above that amount are deductible to the company.
If you fall into this category and don't have a trusted advisor, our team can help evaluate your options.
If you already have a plan but haven't reviewed the competitiveness of your plan design or fees and expenses, we can do some benchmarking to see how you stack up!
About Us: As independent retirement Fiduciaries we have no ties to any platform or investments and with 40 years dedicated to the construction industry, we don't just know retirement plans-we know construction, which means we design solutions around the unique cash flow, workforce, and ownership realities your business actually faces.
------------------------------
Kelly McKay
Business Retirement Advisor
McKay Retirement Consultants
Renton WA
(206) 973-4487
kelly.mckay@mckaywealth.com------------------------------