Health Savings Accounts - Basics

Powering Your Retirement Radio

Health Savings Accounts (HSA) are great for saving for future medical expenses. This isn’t news to most people, but one thing I learned that I should have known was if you have an expense this year and you don’t use it, you don’t lose it.

You can accumulate receipts and year you are covered by a High Deductible Health Plan (HDHP)...meaning if you can afford to pay your expenses now, you can save money that will grow TRIPLE tax-free.

You can collect on your prior expenses in the future after your money has grown tax-free and not have to pay tax on that money ever.

Today I am going to cover five basics:

1) Eligibility 2) Tax Treatment 3) Accumulation 4) Decumulation 5) Portability

The average married couple will spend approximately $361,000 for health care in retirement. At today’s tax rates, if you were in the 24% Federal Tax Bracket and in California’s 9.3% State Tax bracket. Not paying tax on those distributions could save you $180,229.38 in tax, if you were to pull the money from a retirement account to pay those expenses.

Learn More on the podcast website: https://poweringyourretirement.com/2022/11/10/hsabasics