Seattle Financial Planning: 4 Money Moves to Make This Spring

If you live in the Seattle area and haven’t looked at your retirement accounts since last year, spring is a good time to check in. Not because the market is doing anything dramatic — but because a few changes in 2026 affect how Washingtonians should think about saving, taxes, and long-term planning.

The WA Capital Gains Tax Is Sticking Around

Washington’s 7% capital gains tax on sales above $250,000 survived every legal challenge thrown at it. If you’re selling appreciated stock, real estate beyond your primary home, or business assets this year, this tax applies. The threshold hasn’t been adjusted for inflation, which means more people are hitting it as asset values climb.

Smart planning here means timing your sales. If you’re sitting on a large gain, consider spreading the sale across two tax years to stay under the threshold in each. This isn’t always possible, but when it is, the savings are meaningful. Talk to a CPA before making moves — the rules around what qualifies as a “long-term capital gain” under Washington’s definition have some nuances that catch people off guard.

Catch-Up Contributions Got a Boost

For 2026, if you’re between 60 and 63, you can now contribute up to $11,250 in catch-up contributions to your 401(k) on top of the standard $23,500 limit. That’s a total of $34,750. This is the enhanced catch-up provision that went into effect last year, and it’s worth maxing out if you can afford it.

If you turned 60 this year and your employer offers a 401(k) match, you’re potentially leaving thousands on the table by not increasing your contribution rate. Even if you can’t hit the full limit, bumping up by a few percentage points now compounds significantly over the next five to seven years before you retire.

Seattle’s Cost of Living and Retirement Math

Here’s something that doesn’t get discussed enough: Seattle’s cost of living affects your retirement number more than most cities. Housing costs in King County mean your retirement savings need to work harder if you plan to stay in the area. The general rule of thumb that you need 70-80% of your pre-retirement income? In Seattle, bump that to 85-90%.

Property taxes continue to climb. If you own a home in Seattle or the Eastside, your annual property tax bill has likely increased 8-12% over the past two years. That’s a fixed cost that doesn’t go away in retirement and doesn’t care about your income level.

The flip side is that Washington has no state income tax, which is a genuine advantage for retirees drawing from traditional IRAs and 401(k)s. Every dollar you pull out in retirement is taxed only at the federal level. If you’re comparing retirement destinations, this matters a lot once you start doing the math.

Roth Conversions Still Make Sense

If you’re in a lower income year — maybe you changed jobs, took time off, or your business had a slow stretch — consider converting some traditional IRA money to a Roth. You’ll pay income tax on the converted amount now, but all future growth and withdrawals are tax-free.

The math works especially well for Seattle residents because of the no-state-income-tax situation. In states like California or Oregon, a Roth conversion triggers both federal and state tax. Here, you’re only dealing with the federal hit. That’s a built-in discount on conversions that residents of neighboring states don’t get.

One Thing to Do This Week

Pull up your retirement accounts and check two things. First, are you contributing enough to get your full employer match? If not, fix that immediately — it’s free money you’re declining. Second, look at your asset allocation. If you haven’t rebalanced in over a year, your stock-to-bond ratio has probably drifted from your target. A quick rebalance takes fifteen minutes and keeps your risk level where you actually want it.

Financial planning doesn’t have to be complicated. Small adjustments made consistently beat dramatic overhauls every time.