Health Savings Account: The Savings Account You Need
The benefits of an HSA extend beyond your current healthcare needs, says CFP Board Ambassador Dan Mathews, CFP®
Determining the best healthcare coverage plan can be difficult. Often, consumers choose a healthcare plan without really knowing what the upcoming year has in store for their family’s health. Because you can’t predict the future, there are times consumers must cover out-of-pocket expenses that may not be covered by their health insurance or are expenses they must pay before reaching their deductible.
When consumers enroll in a high deductible health plan, they are eligible to open a health savings account (HSA), which serves as a personal savings account to be used for qualified healthcare expenses. A health savings account can supplement health insurance and better serve consumers in long-run, says CFP Board Ambassador Dan Mathews, CFP®.
“Many consumers are unaware of the value that a health savings account can provide in their overall savings strategy,” says Mathews. “Opening an HSA is one of the best things consumers can leverage to not only cover out-of-pocket health expenses, but to ensure they are utilizing the unique tax benefits beyond qualified medical expenses, such as building retirement health savings.”
If you are on the fence about the value of a health savings account, Mathews highlights why an HSA is the ‘holy grail’ of investment vehicles:
- Triple-Tax Benefits: All contributions made to your HSA are pre-tax deductions and the money within the account grows tax-free. When the time comes to make qualified medical expenses, the money used is tax-free, as well.
- ‘Catch-up’ Contributions: If you are age 55 or older, you can make contributions up to $1,000 in ‘catch-up contributions’ to help save for medical expenses in the future, like retirement.
- Flexible Contributions: Regardless of whether you experience a qualifying event such as a change in marital status or the number of dependents on your health plan, you can adjust the contribution election plan throughout the year.
Read Mathews’ full blog post here with more details.
For more guidance on how a health savings account can benefit your savings strategies, talk to a CERTIFIED FINANCIAL PLANNER™ professional today or visit www.letsmakeaplan.org.
Certified Financial Planner Board of Standards, Inc. is the professional body for personal financial planners in the U.S. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning. CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms and consumer groups as the standard for financial planning, CFP® certification is held by more than 83,000 people in the United States.
Dan Drummond, Director of Communications