Using HSAs in Your Retirement Planning
Health savings accounts (HSA) can be a powerful tool when incorporated into your retirement planning. Too often HSAs are only considered for immediate or near-term medical costs. However, when used strategically, HSAs can provide years of benefits well beyond the current tax year.
Triple Tax Advantage
Health savings accounts are one of the most tax favorable instruments in the market today. Most plans are contributed to through pre-tax deposits through an employer-sponsored plan. Funds then grow tax-free year after year. Finally, funds may be withdrawn tax-free for qualified expenses.
Long Term Care Costs
Nursing homes can be expensive with annual costs eclipsing $90,000 a year. Health savings accounts may be used to pay the premiums for a tax-qualified long-term care insurance policy. When long-term care services are rendered, the HSA can pay for the costs not covered by Medicare while retaining the tax-free benefits.
Estate Planning Benefits
For married couples, it isn’t uncommon for one individual to not need to dip into their health savings accounts. If your spouse is named as the designated beneficiary, any funds left within the account will be passed on with the same triple tax advantages of the original account.
Pay for Non-Medical Expense
A common misconception about health savings accounts is the funds must only be used for medical costs to receive the tax benefits. This is certainly not the case. The items and services eligible to HSAs are far-reaching and encompass such items as acupuncture, feminine hygiene products, and even guide dogs. And after reaching the age of 65, the 20% penalty disappears for non-eligible items, only leaving you to pay income tax on the withdrawal.
Pay for Pre-Retirement Expenses
Medicare eligibility begins at age 65. If you plan on retiring early, a health savings account can be used as a bridge between when your employer-sponsored plan ceases and Medicare kicks in. If your goal is to retire early, look to funding an HSA early and often to provide a fund outside of your general savings for medical costs.
If you have questions or would like to learn more about HSAs and retirement planning, contact our office.
- Aging and Our Body’s Ability to Heal Itself
- Keeping Health Insurance After a Layoff
- Waking Up to the Impact of Insomnia
- How Life Insurance Benefits Women
- What experts say about raising the retirement age
- Coverage for healthcare treatment denied? Here’s what you can do.
- Sharing the Road with Cyclists
- Buying Life Insurance for an Elderly Parent?
- Medicaid Unwinding: Your Questions Answered
- Living Your Best Life After 60
- Buying Health Insurance: A Millennial’s Guide
- Self-Love Ideas for Valentine’s Day
- Life Without Clutter
- Set Yourself Up for Success with Your Fitness Routine
- Winter Hydration – Do I Need It?
- I’m 60+; Do I Need Life Insurance?
- Why Do I Keep Breaking My New Year’s Resolutions?
- Closing Out the Year with a Smile!
- How to Enjoy a Long Layover
- 6 Cold Weather Safety Tips
- 10 Tips for Managing Cholesterol Levels
- How Much Life Insurance Do You Need Right Now?
- 3 Top Tips for Better Posture
- Building Bone Density for Seniors
- Living Outside Your Comfort Zone in Retirement
- 3 Top Habits that Lead to a Happy Life After Retirement
- Should You Insure Your Gifts?
- Everything You Need to Know When Retiring Under 65
- 7 Benefits of Slow Travel
- Utilizing Medicare Preventative Services
- The Harsh Reality of Credit Card Fees
- Keeping Your Health Insurance Affordable
- 7 Tips to Weather Challenging Periods in Your Life
- What is a Variable Annuity? 4 Key Details You Should Know
- 4 of the Best Ways to Stay Healthy this Summer
- How to Prevent Sun Damage to Your Eyes
- 3 Tips for Safer Grilling
- When the Sun is NOT Your Friend (What You Need to Know about Sun Exposure)
- Tips to Avoid Stress Eating
- Common Exercise Pains – How to Work Past Them and When to Call for Help
- Signs Your Identity Has Been Stolen (and what to do about it)
- How Does Inflation Affect Life Insurance?
- Know the Benefits of Walking
- Do Brain Food Supplements Really Work?
- Ways You Can Spend Less on Gas
- What Are Alternatives if LTC isn’t Right for You?
- 4 Tips for a Less Stressful Summer
- Veteran and Medicare Benefits Work Together
- What are the Safest States From Natural Disasters?
- How to Choose an In-Home Care Provider for Your Loved One in 5 Steps
- 7 Myths About Your Back Pain
- 5 Foods that Will Help Keep Your Mind Healthy
- Don’t Throw Away Those Used Coffee Grounds
- I’m 50 Years Old. Should I Keep My Life Insurance?
- How to Spot Government Imposters
- 5 Mistakes to Avoid When Buying a Life Insurance Policy
- Happiness Through Healthy Food
- 5 Step Checklist to Choosing a Health Insurance Plan
- 5 Creative Spring Décor Ideas
- 10 Ways to Maintain Healthy Joints
- 3 Incredible Healthcare Smart Technologies Coming Your Way
- Do I Need a Long-Term Care Plan?
- Senior Diet: To Meat or Not to Meat
- How to Take Care of Your Personal Intangible Assets
- Dream All-Inclusive Trips to Escape the Cold
- How to Get Health Insurance if You’re a Freelancer
- Safety Tips for Driving in Winter
- Ways to Locate a Lost Life Insurance Policy
- Critical Times in Life that You Need Life Insurance
- Giving and Forgiving
- Why Buy Life Insurance on Children
- Things We Are Grateful for This Year
- What to Avoid When Switching to Medicare from the Public Health Exchange
- Peoria's Best Health Insurance Agency 2021
- How to Host a Successful Virtual Holiday Party
- Is One of These Factors Keeping You from Seeking Life Insurance?
- Who Invented Insurance Anyway?
- Common Senior Micronutrient Deficiencies
- The Art of Aging Well
- New Energy After 60? 4 Ways to Biohack Your Health
- Insure What? Celebrity Body Parts Insured
- Ways to Enjoy the Outdoors at Home
- Using HSAs in Your Retirement Planning
- Meditation: Seizing the Moment
- 6 Strange Insurance Policies You Can Buy
- How Valuable Is Cash Value Life Insurance?
- Mistakes You Can Make When Exercising at Home
- Why You Should Never Lie to the Underwriter
- 3 Vegetables You Can Plant and Grow Anywhere Right Now!
- Forget Salad Recipes, Try a Salad “Matrix”
- Benefits of Dental Insurance