Jun 26, 2020
This week I’m talking about how much healthcare will cost in retirement.
As I mentioned earlier this week, the average retired couple age 65 in 2019 will spend $285,000 on health care expenses in retirement. For single retirees, the estimate is $150,000 for women and $135,000 for men. Ouch!
Today, I’m talking about how you can pay for those health care costs, now - before you retire! You can do that through the holy grail of retirement savings accounts - the health savings account. If you have a high-deductible medical insurance plan through your work, you can save up to $7,100 in a HSA in 2020. If you’re over age 50, you can add another $1,000 to your HSA this year.
Many people who have access to an HSA through work just view it as a savings account that exists to help them pay for doctors visits and medical bills now.
But I want you to think instead about the Health Savings Account as a tool that will help you pay for healthcare costs long after you’re retired. See, you can invest your HSA to grow over time, so you’ll have more money for doctor visits, prescriptions, and all kinds of health care costs, next year or 20 years down the road.
And the beauty of the HSA and why it’s the holy grail of retirement savings accounts is that it offers tax benefits that no other retirement savings account can match: tax-deductible contributions on money going in, tax free growth, and tax-free withdrawals when you pull the money out to pay for healthcare costs.
That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.
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