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One Minute Retirement Tip with Ashley

Apr 24, 2019

This week, we’re going back through the archives of the One Minute Retirement Tip to cover my hand picked favorites. I’m covering a wide range of retirement topics that you might have missed along the way. These are the episodes that I think give you the most useful information to help you on your path to retirement, all in about 1-3 minutes per day.

I believe that a Health Savings Account, or an HSA, is the best way to plan and save for healthcare costs in retirement. Why?

Because it allows you to save for healthcare costs today and get a massive tax break for it!

You’ll be able to sock away up to $8000 in your HSA account in 2019 if you’re over 55 ($7000 if you’re under age 55).

With an HSA, you get the holy grail of tax benefits, something that no other retirement savings account can match - not your 401k, not a Roth...let me explain.

Money going into an HSA is tax deductible. Then, once it’s inside the account, those HSA contributions grow tax-free...and as long as the money on the way out is used for qualified medical expenses, it’s not taxed on the way out!

Because of these massive tax benefits - tax deductible contributions, and no taxes on growth or withdrawals - many financial gurus argue that you should max out your HSA before you save in your 401k, because the tax benefits are so phenomenal.

If your 401k contributions are matched by your employer, I don’t agree with that logic, but their emphasis on the importance of the HSA is spot on.

If you start saving in an HSA early enough, you can pay for a significant portion, maybe all of your future health care expenses with those HSA funds, because you can invest the account to grow over time.

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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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, HSA, HSA contribution limit, health savings account, what is a HSA, how much can i put in a HSA