For Those That Invested in Their Health Savings Account, This Is the Season to Be Thankful
If you invested in the stock market, and perhaps some bonds, within your health savings account this year, you probably have some pretty great results.
There are very few expenses that we can actually save and invest for like we can for retirement and college education.
Health costs are probably going to cost you and your spouse over $200,000 from age 65 throughout the remainder your lifetime.
There's an opportunity to benefit from the health savings account program by putting more money in than you might need, and also not spending the money immediately.
One of the neatest things that I've read is that you can save up your receipts and you don't have to take the distribution in the current year. If you’re able to pay for minor medical costs out-of-pocket, you’ll reap the benefits of leaving the HSA untouched, down the road. After age 65, you may withdraw from your HSA for non-medical expenses without the 20% penalty that applies before the age of 65.
You’re growing that money in what is essentially a Roth IRA for health costs, on steroids.
Not only like the Roth do you get tax-free growth and tax-free distributions, but you also get a tax deduction on the frontend.
These accounts are a triple threat.
Unfortunately, the limits that you can contribute per year are relatively low; however, over time they can add up substantially.
If you're interested in learning more, see our PSA on HSAs, and we'd be happy to discuss with you, as well. Happy New Year.
Thanks for taking a look!
Tom Gartner and Matt Bennis