On line heating and cooling calculators are not accurate. The proper way to do this is to either have the contractor do a Manual J heating and cooling load calculation, or buy the software and do your own calculation. You can purchase a residential version of the calculation software for $49 at hvaccalc.com.

The winter design temperature for Seattle Tacoma airport is 26 F degrees. That is fairly mild for a winter temperature. A 60,000 BTU furnace at 95%+ efficiency should be adequate for a 1765 sq. foot house with good insulation and double pane windows.

Do you know the efficiency of your current furnace? Given it is 24 years old it mostly likely is rated for 80%, there your current furnace has an output of about 64,000 BTUs (80,000 * 0.80). A 60,000 BTU furnace at 95% would have an output of 57,000 BTU. If you installed an 80% efficiency furnace the output would be smaller (48,000 BTU) but probably sufficient for the coldest night you are likely to encounter.

The data on gas furnace nameplates often includes both input BTU/hr and output BTU/hr. Knowing both, you can calculate the thermal efficiency, which is simply the ratio of output/input.

Heating and cooling load calculations will differ depending on certain assumptions such as the air infiltration rate and duct leakage. I suggest you invest in a blower door test and a duct blaster test during the design/specification of a replacement system. You may find that improved air sealing and duct sealing can reduce the size, initial cost, and operating cost of your new system.

"The house is 1765 sq foot split entry with good insulation and double pane windows and i live in the Puget Sound Region of Washington state."

Based upon the information provided, 60k BTU, 95% AFUE should be plenty. Companies will frequently oversize equipment to prevent callbacks with "insufficient heat" complaints.

We're in a similar-size house, also Puget Sound region. Had to replace the furnace when we moved in, and the contractors just shoved in an 80,000 BTU furnace. Too much output for the supply ducts the house was built with, and far too much for the return ducts the house was built with. Mike_home and Charles Ross's advice is good--get someone to do the proper calculations so you get a furnace that fits the rest of your HVAC system. Something we learned about too late, so we get to pay twice.

@mike_home appreciate that calculator link!