For Mark Roberts’ Use: Turn on the evening news on any given day, and you’re likely to see at least one story on healthcare. The cost of healthcare is rising, representatives can’t agree on a healthcare bill, health insurance companies are dropping out of marketplaces… The list goes on and on. Healthcare is no doubt one of the largest concerns we face as a nation.
However, we can at least agree that prices are rising dramatically. Currently, a 65-year-old retiree can expect to spend at least $250,000 on Medicare over the course of their retirement years. That figure doesn’t even account for other out-of-pocket medical expenses. We’re sorry if we just shattered your illusions that Medicare would cover everything you need!
Unfortunately, that’s just how much you’ll spend on medical expenses in retirement. Right now, most working Americans report that their health insurance premiums have increased over previous years. Of course, you still have to meet your deductible and pay co-pays for appointments and medications. The bottom line is that you’re paying a lot for medical costs now, and will probably be paying even more in the future.
Luckily, there is at least one option that can help you address both of these problems at once. If you’re enrolled in a lower-premium, higher-deductible healthcare plan, you might be eligible to contribute to a Health Savings Account (HSA).
With an HSA, you make pre-tax contributions to the account, and you can have those deducted automatically from your paycheck. Your money grows tax-free in the account, and you can use it to cover out-of-pocket medical expenses.
If you don’t use up all of the funds in your account, they roll over from one year to the next. And if you don’t use up the money during your career, you can even access the money for qualified medical expenses during retirement.
Essentially, an HSA is both a medical savings account that you can use now, or a way to save money for healthcare expenses in retirement.
To learn more about HSAs or other retirement planning strategies, give us a call. We can discuss your needs and concerns in more detail, and make recommendations for possible solutions.