This message is specifically for folks in the USA with Health Savings Accounts (HSAs) or who have the option to have one.
I've had a HSA for a long time. Probably 10 years at least. But after a "pre-retirement bootcamp" seminar at work recently, I'm looking at them in a whole new light. I didn't learn anything new about them that I didn't know before, but the presenters put the pieces of the puzzle together in a way I had never thought of before.
The pieces are:
- You contribute to them with pre-tax money
- You spend the money tax-free
- If your HSA provider supports it, you can invest with the money to try to keep inflation from eating away at the savings
- Most people spend a lot of money on medical care after retirement
The new insight? This is an awesome vehicle for retirement savings, because you are going to have medical costs in retirement. I wish I had realized this 10 years ago! Until now, I've had my contributions set so as to save enough to cover my annual medical plan deductible costs. Since we have rarely hit that deductible, we've accumulated a bit of money in the account. Now, I want to start stuffing more money into it. Current contribution limits are, if I remember, over $4K if you have an individual health plan and over $8K if you have a family plan.
HSAs are only available if you have a high-deductible health plan. If you were on the fence about whether to swap to a high-deductible plan, this should push you over the edge. I'm sending a suggestion in to HR that they point out this benefit before next year's open enrollment.
I'm trying to provide some useful information about retirement planning. Don't use this thread to go on a tirade against all the many flaws of the American healthcare system. If you do, I'm simply going to drop you, OK? You are welcome to have your tirade on another thread.
