Lemons to lemonade – how to boost your retirement savings
Medical costs and health insurance premiums are skyrocketing. However, there is a silver lining behind the cloud — a retirement savings opportunity. Qualifying for a high deductible health insurance plan allows you to have a Health Savings Account (HSA). Putting aside money pre-tax for qualified medical expenses in an HSA is a huge tax benefit.
Alternatively, your employer may have a Flexible Spending Account (FSA) for putting aside funds for medical expenses pre-tax. Just be sure your estimates for medical expenses are on target because any money left in an FSA at the end of the year will be forever lost.
Health Savings Accounts turn FSA lemons into retirement savings lemonade … if you qualify
Qualifying for an HSA depends on your tax filing status, your health insurance deducible and your out of pocket payment maximum. HSAs are not a use it or lose it situation. Unspent funds roll over to the next year and continue accumulating over time. Some HSA plans allow you to invest a portion of the funds in mutual funds, giving an additional opportunity for tax-deferred growth. At age 65, it also becomes available as a source of retirement savings, a potential retirement income source you hadn’t counted on.
Click on today’s article to learn more. This is a journey you do not want to take alone.