Because Health Care Will Be a Big Part of Getting Older....
Americans are living longer, no question. Diseases and illnesses that killed people just 30 years ago now only cause a blip on the radar screen of life. But to live longer and healthier, most of us will pay much, much more.
If you retire at 65 but live until 95, how will you pay for your medical care for 40 years? Will you rely on Medicare? Will there be enough left over after the Baby Boomers use it all to also take care of you? Will you rely on Medicaid (if you have a low income and/or are disabled, yes you might). But if you plan to have freedom and wealth, you can start taking advantage of some tax breaks now in the form of Health Savings Accounts.
Health Savings Accounts (HSAs) were created by the Medicare bill in 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. Your parents (or even you) can open a Health Savings Account and have the money invested for a positive return, and then withdraw the money, on a tax-free basis, to pay for various health care expenses. Again, this puts the power of compounded interest in a tax-free environment to work.
After all, medical expenses are not likely to go down, and as we live longer, we usually pay more to do it.
If you retire at 65 but live until 95, how will you pay for your medical care for 40 years? Will you rely on Medicare? Will there be enough left over after the Baby Boomers use it all to also take care of you? Will you rely on Medicaid (if you have a low income and/or are disabled, yes you might). But if you plan to have freedom and wealth, you can start taking advantage of some tax breaks now in the form of Health Savings Accounts.
Health Savings Accounts (HSAs) were created by the Medicare bill in 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis. Your parents (or even you) can open a Health Savings Account and have the money invested for a positive return, and then withdraw the money, on a tax-free basis, to pay for various health care expenses. Again, this puts the power of compounded interest in a tax-free environment to work.
After all, medical expenses are not likely to go down, and as we live longer, we usually pay more to do it.
For more information: http://www.treas.gov/offices/public-affairs/hsa/pdf/HSA-Tri-fold-english-07.pdf
hsa's are a great way to take control of your health spending...you get to make the choice as to where your medical dollars are being spent and if you enjoy good health you end up saving pre tax dollars in your account...many of my younger clients express their desire to retire early, and when i explain to them the actual cost of paying for their health insurance between the age of early retirement and Medicare it is a real eye opener to what the costs really are....hsa's are great for the person who has to pay for their own insurance, but most people get their benefits from an employer...hsa's once they get to the employer market place, and they are starting too...will allow younger people to actually save health dollars so that they might be able to retire early and use those dollars to off set the cost of medical insurance...but it will take time to build up your account and a few bad years could have an adverse impact on those dollars...so it is something that you must get educated on and then monitor....as with any financial tool you must get some one who will work with and educate you on the use of that tool...jcb
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