Tag: Retirement planning

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APRIL 2025

Retirement planning: 3 ways Costco helps

Ever wonder what life will be like after you stop working? Often, what retirement will look like depends on how you prepare before you retire. Whether retirement is a year away or 25 years, learn what you need to know now for retirement later.

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Costco 401(k) Retirement Plan: The annual company contribution helps you grow your savings

Costco invests in your future with both matching and annual company contributions to your Costco 401(k) Retirement Plan account. Employees in Puerto Rico have the Costco Puerto Rico Retirement Plan.

Eligibility: Once an employee has completed a year of service, they’ll be entered into the company contribution portion of the plan beginning the first day of the month after their anniversary date.

Annual company contribution: Costco contributes a percentage of eligible earnings paid from the entry date – regular pay, overtime, vacation pay, holiday pay, sick pay, paid time off and extra checks – to your 401(k) account*, even if you don’t make any contributions of your own.

The contribution starts at 4% for an employee’s first few years, and increases as your years of service increase, capping at 9% after 25 years.

Matching company contribution: The company also matches 50% of your own contributions, up to $500 a year.

Best of all – these contributions belong to you with immediate 100% vesting.

To check your account balance, set up automatic payroll deductions, adjust your investment mix and much more, go to RPS.TRowePrice.com. You’ll also find financial tools and resources, including an Education Library, Retirement Income Planner and calculators:

  • Paycheck Impact Calculator
  • Contribution Maximizer
  • College Planning Calculator
  • Roth Comparison Calculator
  • Social Security Calculator and more

2024 Annual company contribution: Costco contributed nearly $616 million to employee retirement accounts in 2025 for the 2024 annual company contribution. If you missed the letter Costco sent noting this year’s contribution amount, see your quarterly statement from T. Rowe Price.

Years of
Service		Company
Contribution		Average Contribution
Per Year
1-3 years4% $1,371
4-9 years5%$2,996
10-14 years6%$4,198
15-19 years7%$4,994
20-24 years8%$5,897
25+ years9%$7,147

*Employees at union warehouses should consult their collective bargaining agreement for more information about Costco’s contributions to their 401(k) plan.

Purchase company stock and become a shareholder in the company

The Employee Stock Purchase Plan (ESPP) with UBS lets you purchase Costco stock through payroll deductions. You choose the amount you’d like to invest each pay period. Fees and commissions for these purchases are fully paid by Costco. To learn more, visit Costcobenefits.com > Financial Wellbeing > Employee Stock Purchase Plan (ESPP).

Get familiar with Medicare — know your health coverage options before and after 65

While Medicare is available beginning at age 65, if you retire before age 65, you’ll need health coverage to fill the gap. You can explore coverage options available at HealthCare.gov, or you can contact the Benefits Department at 800-284-4882 to learn more about your retirement health plan options.

Do you or a family member have questions about Medicare, Medicare Advantage or Supplemental plans? Get answers to your questions. SGIA Medicare Consulting offers one-on-one support to help you find the plan that fits your needs. This service is available at no cost to all Costco employees and their families, including parents.

To connect with a Medicare expert, call 888-821-6486 or learn more at sgiamedicare.com/costco.

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APRIl 2025

Your financial knowledge toolkit

Dealing with money and finances can be overwhelming. But small changes, wise choices, and a little guidance and support can help you reach your financial goals.

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Here are some tips:

Be mindful with your spending

“I can’t afford a house, so I might as well treat myself to a fun weekend.” That might seem like a good idea in the moment. But here’s the truth: small, intentional spending decisions can add up more quickly than you think, and help you reach big goals.  

Reduced spending can also reduce waste in landfills. Ordering out for dinner means higher meal costs plus plastic bags, boxes and other disposable materials. Meal planning for the week on a free day helps you save money and reduce your carbon footprint.

Write down your financial goals

What are your financial goals? What’s important to you? SmartDollar, your no-cost confidential online personal finance program, is designed to help you reach your goals.

SmartDollar’s step-by-step plan helps you take small steps to pay off debt and save more using the online budgeting tool. It keeps you motivated with video lessons from personal finance experts and gives tips to: 

  • Pay off debt faster
  • Set up an emergency fund
  • Save for college 
  • Buy a car
  • Save for a down payment on a house

Free one-on-one financial coaching is also included. To sign up and get started, visit SmartDollar.com/enroll/costco or text Costco to 33789* to download the app.

If you want to grow your financial knowledge, additional financial resources are available through Resources for Living. Get a free 30-minute consultation per concern with a financial specialist. They can help with things like budgeting, credit repair and reports, mortgages and refinancing, debt management and tax questions. Visit RFL.com/Costco to request a free financial consultation.

Be smart about big purchases

Do your research before buying a house or car. Take the time to compare prices and learn about the market in your area. Consider things like rates and resale value to make an informed decision and get the best value for your money. Consider checking out the Costco Auto Program.

Watch these SmartDollar videos for additional ways to save:

Take advantage of these ways to save

Your Costco benefits can help you make the most of your money.

  • Save on monthly expenses — New for 2025, you have access to LifeMart for employee discounts on gym memberships, virtual fitness and childcare.**
  • Contribute to your 401(k) — Costco offers matching and annual contributions to your retirement plan with T. Rowe Price. To check your 40l(k) account balance, set up automatic payroll deductions, adjust your investment mix and much more, go to RPS.TRowePrice.com.
  • Purchase company stock — The Employee Stock Purchase Plan (ESPP) lets you buy Costco stock through payroll deductions. You choose the amount you’d like to invest per pay period.
    To learn more, visit Costcobenefits.com > Financial Wellbeing > Employee Stock Purchase Plan (ESPP). 
  • Save on taxes — Use reimbursement accounts for eligible expenses.
    • A Health Care Reimbursement Account (HCRA) lets you set aside pretax dollars to pay eligible medical expenses. You can use it for things like copays, deductibles and coinsurance, dental and vision expenses, plus prescriptions and over-the-counter items. Sign up for an HRCA during Annual Enrollment.
      To learn more, visit Costcobenefits.com > Financial Wellbeing > Health Care Reimbursement Account.
    • A Dependent Care Assistance Plan (DCAP) lets you set aside pretax dollars to pay for qualified child and elder care expenses needed for you and your spouse to work. You can use it for expenses like day care, before- and after-school care, nursery and pre-school, and in-home aids. Keep in mind that the DCAP isn’t for dependent health care expenses. You can sign up, change or stop your DCAP based on your dependent care needs.
      To learn more, visit Costcobenefits.com > Financial Wellbeing > Dependent Care Assistance Plan.

NOTE: If you were enrolled in a reimbursement account in 2024, remember that your claim filing deadline is April 30. Any unused funds are forfeited after this date. Only your HCRA rollover amount of up to $640 can be carried over from 2024 to use in 2025.

*Message and data rates may apply. 

**Childcare discounts are not available in Puerto Rico. 

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APRIL 2024

Savings dos and don’ts

Saving money not only feels good, it also gives you more control and opportunities throughout your life. With savings in the bank, you can more easily meet life goals, such as taking a big vacation, upgrading your home, or funding a child’s education.  

And here’s the good news: Saving money is not as hard as it may seem. With some thought, planning and a little discipline, you can make small changes that can make a big difference.  

Check out the ideas below for inspiration. And don’t forget to use your Costco benefits to help you reach your savings goals. 

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Do automate your savings. 

By setting up monthly automatic transfers from your checking account to your savings account, your money will build without any extra work on your part. Even if it’s just $25 a month, it will add up fast. Consider naming your savings account or accounts to match your savings dreams or goals, such as “vacation fund,” “emergency fund” or  “down payment.”

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Do take advantage of reimbursement accounts.*

Are your children in afterschool care? Do you need a dental crown replaced? Could your elderly parents use some in-home help? You can set aside pretax dollars for these expenses — and save money on taxes — with a reimbursement account administered by Inspira Financial (formerly PayFlex).

Enroll in a Health Care Reimbursement Account (HCRA) and/or a Dependent Care Assistance Plan (DCAP) during Annual Enrollment in November. You can also enroll in DCAP during the year if your childcare needs change. 

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Do teach your kids how money works. 

Kids can and should develop good money habits at an early age. You can help by teaching them the connection between work and money and encouraging them to have short- and long-term savings goals. Younger children can watch their savings grow in a clear savings jar. Tweens and teens can be given more responsibility by using a banking app on their phone to follow their savings progress or make transfers from checking to savings.

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Do start small.

It’s often easier to save if you start with a short-term goal. For example, committing to saving $20 a month for six months is more attainable than setting a goal to save $300 per month for a year. Once you reach your short-term goal, you’ll have created a habit of saving that can motivate you to keep going.

Don’t forget to monitor your autopay accounts.

Using autopay for gym memberships, streaming subscriptions and other services is a common practice. But this convenient way of paying also has its costs. In a recent survey, 42% of those polled continued to pay for subscriptions they no longer used.1 If you use autopay, make sure to regularly review what you’ve signed up for so you can cancel services you’re not using.

Don’t put off saving for your retirement.

Even saving a few dollars per paycheck for retirement can help you have a more secure financial future. The younger you start, the better, since you earn interest every year on both the money you save and the interest you earn along the way. For example, the chart below, provided by T. Rowe Price, shows the substantial impact that delaying your retirement contributions for ten years can have on the total amount you have available when you retire.

A bar chart about a person contributing $125/week for 45 years has more than double the retirement savings of a person contributing $125/a week for 35 years.
The chart is for illustrative purposes only and is not meant to represent the performance of any specific investment option. Final account balances are rounded to the nearest thousand. Assumes $125 invested each week in a tax-deferred account and a 7% annual rate of return for a hypothetical investor from age 20 to age 65. All investments involve risk, including possible loss of principal.

Costco’s retirement plan through T. Rowe Price makes it easy to save with automatic enrollment. You can choose a percentage of your pre-tax income to contribute. Costco makes contributions to your retirement plan even if you don’t contribute yourself.

Don’t skimp on preventive care.

Medical and dental conditions have better outcomes — and are less expensive to treat — when detected early. Make sure to get your annual physical exams, dental cleanings, vaccines and recommended screenings. Preventive care is free when you use an in-network provider.

Don’t go it alone.

We all have something to learn about improving how we manage our money. A SmartDollar® financial coach meets you where you are financially to help you make the changes necessary to reach your savings goals. You can start these free one-on-one sessions at any time and sign up for as many as you want. Spanish-speaking coaches are also available.

*Not available in Puerto Rico. 

Sources:
NerdWallet. How to save money now (before you really need it).
Americasaves.org. 54 ways to save money.
Ramsey Solutions. What is a financial coach?
Ramsey Solutions. 15 ways to teach kids about money.