{"id":7318,"date":"2024-11-05T04:33:10","date_gmt":"2024-11-05T04:33:10","guid":{"rendered":"https:\/\/finderica.com\/how-a-health-savings-account-hsa-fits-into-our-family-financial-plan\/"},"modified":"2024-11-05T04:33:10","modified_gmt":"2024-11-05T04:33:10","slug":"how-a-health-savings-account-hsa-fits-into-our-family-financial-plan","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=7318","title":{"rendered":"How A Health Savings Account (HSA) Fits Into Our Family Financial Plan"},"content":{"rendered":"\n<div>\n<figure class=\"embed-base image-embed embed-0\" role=\"presentation\"><figcaption><fbs-accordion><\/p>\n<p class=\"color-body light-text\">Shot of a young family playing together on the lounge floor at home<\/p>\n<p><\/fbs-accordion><small>getty<\/small><\/figcaption><\/figure>\n<p>For a while I was very content investing for our family\u2019s future with my workplace 401k and a Roth IRA. These two tax advantaged vehicles were driving our family toward a very comfortable retirement.<\/p>\n<p>A few years ago, I discovered another stealth retirement investment option called the Health Savings Account (HSA). Just like the 401k and the Roth IRA, the HSA also has many tax advantages.<\/p>\n<p>In fact, it\u2019s gained a lot of attention for its \u201ctriple tax advantages.\u201d Here they are:<\/p>\n<ul>\n<li><strong>Pre-tax contributions<\/strong> (with your employer sponsored plan) or tax deductible contributions if you\u2019re employer does not have an HSA option<\/li>\n<li><strong>Tax-free withdrawals<\/strong> as long as you use the funds for qualified medical expenses<\/li>\n<li><strong>Tax-free growth<\/strong> when the money is saved or invested<\/li>\n<\/ul>\n<p>For a period of time when our income was higher, our family maxed out this HSA option. It helped us to stash away some money for the near term and the long term.<\/p>\n<p>With the money saved and invested in our HSA, here\u2019s how we plan to use it. Hopefully this will give you some ideas on how an HSA can benefit your family.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Save For Everyday Health Care Expenses<\/h2>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p>Our HSA account has been a convenient way for us to pay for everyday health care expenses like copays and doctor visits.<\/p>\n<p>Not only are we able to withdraw from the account tax-free, it helps us to actually have money set aside. Before the HSA, an unexpected doctor visit would pop up and oftentimes, we\u2019d have to use our emergency fund to pay for it. With our HSA, we\u2019re covered.<\/p>\n<p>To make the payment process easy, we use our HSA debit card. When it\u2019s time to pay for our medical services, we just provide the debit card in person or over the phone and we\u2019re all set. The funds come out of our HSA savings account just like our regular bank account.<\/p>\n<p>With the passage of the <a href=\"https:\/\/www.irs.gov\/newsroom\/irs-outlines-changes-to-health-care-spending-available-under-cares-act\" rel=\"nofollow noopener noreferrer\" target=\"_blank\" class=\"color-link\" title=\"https:\/\/www.irs.gov\/newsroom\/irs-outlines-changes-to-health-care-spending-available-under-cares-act\" data-ga-track=\"ExternalLink:https:\/\/www.irs.gov\/newsroom\/irs-outlines-changes-to-health-care-spending-available-under-cares-act\" aria-label=\"CARES Act\">CARES Act<\/a>, the amount of qualified medical expenses has extended quite a bit. Over-the-counter medications, pain medications, feminine hygiene products and much more are covered. Here\u2019s an <a href=\"https:\/\/livelyme.com\/whats-eligible\" rel=\"nofollow noopener noreferrer\" target=\"_blank\" class=\"color-link\" title=\"https:\/\/livelyme.com\/whats-eligible\" data-ga-track=\"ExternalLink:https:\/\/livelyme.com\/whats-eligible\" aria-label=\"exhaustive list of what\u2019s deemed a qualified medical expense for your HSA\">exhaustive list of what\u2019s deemed a qualified medical expense for your HSA<\/a>.<\/p>\n<p>Since the list of \u201cwhat\u2019s covered\u201d keeps growing, we\u2019re encouraged to keep saving money in our HSA. That way, we\u2019re prepared for the everyday purchases and can save on taxes at the same time.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Invest For Long-Term Health Care Costs<\/h2>\n<p>Outside of the everyday health care expenses, we\u2019re well aware that the cost of health care is only going to grow in the future.<\/p>\n<p>According to a <a href=\"https:\/\/newsroom.fidelity.com\/pressreleases\/fidelity--releases-2023-retiree-health-care-cost-estimate--for-the-first-time-in-nearly-a-decade--re\/s\/b826bf3a-29dc-477c-ad65-3ede88606d1c\" rel=\"nofollow noopener noreferrer\" target=\"_blank\" class=\"color-link\" title=\"https:\/\/newsroom.fidelity.com\/pressreleases\/fidelity--releases-2023-retiree-health-care-cost-estimate--for-the-first-time-in-nearly-a-decade--re\/s\/b826bf3a-29dc-477c-ad65-3ede88606d1c\" data-ga-track=\"ExternalLink:https:\/\/newsroom.fidelity.com\/pressreleases\/fidelity--releases-2023-retiree-health-care-cost-estimate--for-the-first-time-in-nearly-a-decade--re\/s\/b826bf3a-29dc-477c-ad65-3ede88606d1c\" aria-label=\"study by Fidelity\">study by Fidelity<\/a>, a typical 65-year-old can expect to spend an average of $157,500 in medical and healthcare expenses throughout retirement. If that\u2019s the cost today, we can\u2019t even imagine where it\u2019ll be by the time we want to retire 20 years from now.<\/p>\n<p>That\u2019s why we\u2019re using our HSA to invest for our future health care costs today. This will allow us to not only keep up with the rising costs of health care, but we\u2019ll be able to take advantage of growth in the stock market as well.<\/p>\n<p>Even after a few years of investing, it\u2019s amazing to see how our balance has grown. At this rate, we could have around $200,000 by the time we\u2019re 65 years old. This will allow us to cover our annual health care expenses.<\/p>\n<p>Will it be enough to cover all of our health care expenses? Maybe. Maybe not. Since life and the cost of health care can be unpredictable, I\u2019m glad we\u2019re preparing.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Enjoy The Leftovers For Retirement<\/h2>\n<p>Let\u2019s say we\u2019re blessed with happy and healthy years from now until our retirement. With the HSA, we\u2019ll have a large amount of money waiting for us. This will help us feel covered for potential health care expenses.<\/p>\n<p>And what if we want to use it for non-health care expenses? Well, if we wait until age 65, we can use our HSA funds for anything we want with no penalty. We\u2019ll just have to pay the income taxes.<\/p>\n<p>Using the HSA this way works similar to a Traditional IRA or 401k. You don\u2019t pay taxes today, but you pay them when you want to use the money in retirement.<\/p>\n<p>I hope we\u2019ll be in this position, but more than likely, we\u2019ll need these funds for health care expenses. Either way, it\u2019s nice to know that the HSA money can still have a use if we\u2019re super healthy.<\/p>\n<p>That\u2019s one more reason for us to take care of ourselves every day.<\/p>\n<\/div>\n<p><a href=\"https:\/\/www.forbes.com\/sites\/andyhill\/2024\/11\/04\/how-a-health-savings-account-hsa-fits-into-our-family-financial-plan\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shot of a young family playing together on the lounge floor at home getty For a while I was very content investing for our family\u2019s future with my workplace 401k and a Roth IRA. These two tax advantaged vehicles were driving our family toward a very comfortable retirement. A few years ago, I discovered another<\/p>\n","protected":false},"author":1,"featured_media":7319,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[328,1669,191,2068,326,2067,310,327],"class_list":{"0":"post-7318","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-account","9":"tag-family","10":"tag-financial","11":"tag-fits","12":"tag-health","13":"tag-hsa","14":"tag-plan","15":"tag-savings"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/7318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7318"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/7318\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/7319"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}