Best Financial Advisors in Federal Way

Frequently Asked Questions

• Introduction

  There are many titles for financial professionals, so it's challenging to track what each one means. A financial advisor is probably the term you've heard most often. Financial advisor is a broad term for a professional who helps individuals or companies manage their finances, including investment choices. There are over 100 certifications that financial advisors can obtain.
  

  • Financial planners, wealth managers, and investment advisors are all financial advisors with different focus areas.
  • A financial planner helps an individual or a company make a plan to achieve long-term financial goals.
  • A wealth manager helps individuals maintain their wealth through various disciplines and services, such as taxes, estate planning, and investment advice.
  • An investment advisor offers investment advice and recommendations to individuals or organizations.
    

  There’s a misconception that you have to be extremely wealthy to use a financial advisor. In reality, they can be beneficial for people from any income level. Keep reading to find answers to the most commonly asked questions about financial advisors, so you know which type can fit your specific needs.
  

• Does the Federal Deposit Insurance Corporation protect Federal Way depositors?

  In the event of bank failure, depositors in Federal Way are insured by the Federal Deposit Insurance Corporation for up to $250,000 per depositor and per insured bank for deposits in checking accounts, savings accounts, money market deposit accounts, and certificates of deposit. Meanwhile, certain investments and securities are insured by the Securities Investor Protection Corporation for up to $500,000.

• Does the government incentivize Federal Way residents to save up for retirement?

  Residents of Federal Way may be able to claim the IRS’ Saver’s Credit for making contributions to their IRA or company-sponsored retirement plans such as a 401(k) or 403(b). Those aged 50 or older are also allowed to make annual catch-up contributions of up to $7,500 to retirement accounts such as IRAs or 401(k), 403(b), and 457(b) plans.

• What are alternatives to opening a Federal Way bank account?

  An alternative to banking that is open to Federal Way residents is a lending circle, which is a zero-interest and zero-fee loan maintained by a group of people. An example of this is the El Centro de la Raza’s Lending Circles, located in Seattle. Other banking alternatives include prepaid debit cards, fintech apps such as Venmo, PayPal, or Square, and credit unions.

• What 529 plans are available in Federal Way?

  Families in Federal Way looking to fund their children’s college education may choose to open a savings or a prepaid tuition 529 plan. The savings plan, or the DreamAhead College Investment Plan, is managed by the Washington Student Achievement Council. Both plans keep pace with the fluctuating costs of college tuition, as ensured by the Guaranteed Education Tuition (GET) Program.

• Are Federal Way capital gains taxable?

  As per ESB 50956, which was signed by Washington Governor Jay Inslee in May of 2021, the state must impose a tax rate of 7% on long-term capital gains in Federal Way and the rest of Washington. Exemptions to this include all sales of real estate and gains from certain eligible assets such as retirement accounts, timber and timberlands, commercial fishing privileges, and certain breeding livestock.

• Are financial advisors worth it?

  Whether or not a financial advisor is worth it depends on your personal situation. If your finances are fairly straightforward, then you may be better off handling it on your own. But if you have substantial assets or a complex investment portfolio, then hiring someone to handle it for you can be well worth the cost.