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Learn the basics

LEARN THE BASICS

OCTOBER 2021

Saving for retirement made easy

Retirement may be years away, but the sooner you start planning for it, the better. By taking advantage of your Costco Retirement Plan now, you can help make sure you enjoy a worry-free retirement in the future.

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Get to know the Costco Retirement Plan

What does your retirement look like? Your plans for the future may include more travel, more time with family or more time to do the things you enjoy without worrying so much about money. It’s all possible with the right planning — and saving.

A more secure retirement depends on what you do today. Your Costco benefits are here to help, with the Retirement Plan,* administered by T. Rowe Price.

Here are the basics:

You’re eligible to participate in the plan once you’ve completed 90 days of service with Costco. You can start making contributions, and receiving Costco’s matching contributions, on the first pay date after the first day of the following month.

Here’s an example: If your 90th day of employment is July 15, you can start contributing on the first pay date after August 1.

You make contributions. With the Retirement Plan, you save part of your paycheck through automatic payroll deductions. When you enroll, you’ll choose a percentage of your pay to contribute. You’ll also choose whether you want to make pretax or after-tax (Roth) contributions, or a combination of the two.

If you don’t make an election within 30 days of the first of the month you’re eligible to participate in the plan, deductions will automatically be taken from your paycheck. You’ll be enrolled to contribute 3 percent of your compensation pretax.

Costco makes contributions. Costco matches your contributions in an amount that’s set each year. This amount is a percentage of your own contribution amount for the year, up to a maximum amount.

Your account grows. When you enroll, you choose how you’d like to invest your account funds. T. Rowe Price offers a variety of mutual funds and information on how to make the right choice(s) for you.

To get started, log in at Costcobenefits.com and select Financial Wellbeing > Retirement Plan Details. Or call T. Rowe Price at 800-922-9945. You’ll set a percentage of your pay to contribute and choose investments to grow your retirement nest egg.

*For Mainland and Hawaii employees, the plan is called the Costco 401(k) Retirement Plan. For employees in Puerto Rico, it’s called the Costco Puerto Rico Retirement Plan.

 

The following resources are available to help you be more in control of your financial well-being. These resources are confidential and available to you at no cost through your Costco benefits.

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Take Action

TAKE ACTION

OCTOBER 2021

Make the most of your money

Being smart about your money can help you have enough for everyday expenses while saving for future goals. Here are some practical suggestions to get you started.

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5 tips for smarter spending & saving

Maybe it’s tough to stretch that paycheck. An unexpected expense pops up. Or you’d love to plan a great vacation. Whatever’s going on in your financial life, there are steps you can take to spend and save wisely. Here are five tips you can use today:

1. Know what you spend

Here’s something to try: For two weeks, save all your receipts and track online purchases using your bank account (or just write them down). Put purchases into groups — food, entertainment, clothing, tech and other expenses. Don’t count essentials like rent/mortgage, utilities and insurance.

Look at your totals. What do you spend most of your money on? How can you spend less? For example, if you spend a lot on takeout and restaurant meals, consider cooking more meals at home and packing a lunch more often. Shop the sales and visit consignment stores for clothing. If you have a tech wish list, narrow it down to one special item you just can’t live without.

2. Budget for the kids (furry ones, too!)

Spending wisely means getting the kids involved. Learn to say “no” to extras that aren’t needed. If life is a whirlwind of after-school activities, choose the most important one and let the others go. Take advantage of free local fun like parks, libraries and playgrounds. Join a school carpool. Trade babysitting services with other parents.

Remember that your furry family members have expenses, including pet food, toys, equipment, annual checkups and the occasional unscheduled vet visit. Make sure your budget has room for your fur babies, too.

3. Save automatically

If your checking and savings accounts are with the same bank, set up an automatic transfer. Decide on an amount to move from checking to savings on a regular basis. Most online banking services let you choose weekly or monthly transfers.

It’s a painless way to save. And don’t worry that it’s not enough. Even a modest amount builds up over time, and it’s much better than not saving at all.

4. Think about trade-offs

Saving for something special? Change your daily spending habits to free up extra money. Let’s say you’re saving for a new cell phone and you buy one or more Starbucks tall lattes every day. Think about how many lattes would pay for the new cell (or at least contribute a good portion of the cost). Cut back on coffees for that new cell phone!

5. Cut health care costs

You can save on health care without sacrificing quality. Use in-network providers. Ask your doctor to prescribe generic drugs whenever possible. Visit an urgent care center or walk-in clinic (instead of the emergency room) for quick, convenient non-emergency care. Take advantage of preventive care, like routine exams and screenings, to stay healthy and catch problems early.

 

The following resource is available to help you be more in control of your financial well-being. This resource is confidential and available to you at no cost through your Costco benefits.

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Take action

TAKE ACTION

MARCH 2021

Your guide to beneficiaries, wills, and trusts

No matter where you are in your life, everyone can benefit from estate planning. Often people think that estate planning is just for the wealthy, for those approaching retirement age, or for those who have children.

However, only about 50 percent of employees have designated a beneficiary (a person or entity who will receive those benefits in the event of your death).

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Almost all Costco employees have life insurance

That’s right! All full-time and part-time employees enrolled in a Costco medical plan, even those who declined coverage because they’re enrolled by another employee or health plan, have life insurance and an accidental death and dismemberment (AD&D) policy that’s paid for by Costco. However, only about 50 percent of employees have designated a beneficiary (a person or entity who will receive those benefits in the event of your death). Without a designated beneficiary, your life insurance may not go to the correct person — or your loved ones will have to take extra steps to access your life insurance. Therefore, it’s important for all employees to designate their life insurance and AD&D beneficiaries by logging onto the enrollment website located on Costcobenefits.com or calling the enrollment center at 800-541-6205. Employees can view and update beneficiary information at any time. 

Don’t forget your retirement accounts 

Most employees also have a 401(k) or 1165(e) account through Costco’s Retirement Plan. Just like life insurance and AD&D, it’s important for employees to designate a beneficiary for their Costco retirement account. (There are some special rules about designating a retirement account beneficiary when you’re married.)

To learn more about beneficiary and eligibility rules, view the Costco Retirement Plan Summary Plan Description located on Costcobenefits.com. To designate a beneficiary to your Costco Retirement Account, log on to TRowePrice.com or call 800-922-9945. 

Learn about wills, trusts, and other estate planning

Designating a beneficiary takes care of your life insurance, AD&D, and retirement plan through Costco’s Benefit Program. But what about your other assets like your house, cars, collectibles, bank accounts, and other investments? And what happens if the unlikely event your death occurs before your children are adults, or you become unable to make financial or health care decisions for yourself?

  • Wills and trusts ensure that your assets and possessions end up where you want them to go. If you have children who are minors, you can also make a will to name who will be your child(ren)’s physical and financial guardian.  
  • Durable power of attorney and health care directives give the person you choose the ability to make decisions for you regarding your health care, legal matters, and finances if you become incapacitated or unable to communicate your own wishes.