The script for HSAs needs to be flipped to address the huge health-care costs that many Americans will face in retirement. However, we need to use and fund them for work and long-term investment in order to maximize their tax benefits in retirement, not just in the short term. HSAS can be used as a means to help us pay for our care and health, but we need them to work for us.
When you compare the average health care costs in retirement with what the average 65-year-old couple are saving for retirement, you can see what’s at stake. HSAs
The Center for Retirement Research at Boston College estimates that the median household retiring with a 401 (k) or IRA saved about $135,000 in 2016. Many Americans who retire will save less in their retirement accounts and will have less money in them than they need if they behave the way they do when it comes to health care. I want a healthy, dynamic economy in which seniors can retire with dignity, but I don’t think any hard-working Californian should have had to choose between working until his death or retiring in poverty. Nevertheless, this illustrates the problem and the need to create more investment opportunities for seniors.
Secure Choice Retirement Savings Plan, which starts when you sign up and change your contributions. There may be a rate at which participants stop and change, but the rate does not change for the duration of the plan, at least until the end of your life.
In 2017, only 5% of HSA users invested anything other than cash, and even people who use HSAs today are essentially using them incorrectly and avoiding tax – beneficial investment growth. This is unfortunate, because perhaps the best benefit of an H SA is the ability to save for the future by deferring investment profits.
Contributions to HSAs are tax deductible, as are the corresponding contributions that your employer pays. HSAS have a lower tax rate than traditional 401 (k) plans, and all contributions to them are tax deductible.
When you withdraw the money to pay for qualifying health care, it is tax-free and any gains are deferred for tax purposes. HSAs are a powerful savings tool, but very few Americans use them. This is because they are best favored by the tax as a savings vehicle.
The law states that many more families and individuals are eligible for federal benefits. These subsidies can be used to reduce monthly premium costs for qualified individuals and to reduce spending on pocket money. To qualify for the subsidies, an individual or family must purchase insurance through the individual market, meet household income requirements, and do not have affordable health insurance through an employer, or be eligible for Medicaid, the government’s health insurance program for the elderly and disabled.
Many Americans do not participate in such plans, so they cannot take advantage of the HSA. One factor that may hold you back is whether you are enrolled or eligible for an H-SAA. Even if you use HSA, it seems that many do not optimize their accounts.
If you are willing to foot the bill, long-term care insurance is a valuable part of your retirement plan. Many Americans use HSAs, but 70% of older adults require longer care, and Medicare generally won’t cover them either.
An independent specialist who does not work for an insurance company but works for you, e.g. as a doctor, nurse or other healthcare provider.
If you don’t have pension cover and want to take out a marketplace plan instead, you can, as long as you don’t have to.
If you voluntarily give up your pension coverage, you can register for health insurance via the marketplace during the next open enrollment period. If you are not covered by the pension scheme, you are entitled to out-of-pocket insurance based on your household size and income. You are not eligible for a tax credit for participating in a new Marketplace plan during this particular enrollment period.
According to Medicare.gov, Medigap is Medicare Supplement Insurance that helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies.
You may be able to take out insurance through the marketplace and get exempt from pocket money based on your household size and income. I have learned that I have marketplace coverage and will soon be eligible for Medicare, but can I forget to transfer what I am eligible for?
If you have Medicare Part A and Part B, you can apply for supplemental insurance called Medigap, which helps cover the cost of prescription drugs and other health care costs for people with pre-existing conditions. If you only want prescription coverage, you can choose Medicare Part D instead of C, and there are plans from private insurers that can add additional benefits such as deductibles, co-payments, deductibles and copies. For more information or to find a Medicare plan that’s best for your needs, contact www.medisupps.com