Copy of Another Savings Option – Health Savings Accounts
After you max out your 401(k), there is another savings opportunity available that you may want to leverage. Read on to find out more.
Recently the IRS announced the inflation-adjusted limits for "Health Savings Accounts" or HSA's for 2020. The limit moved from $3,500 for individuals to $3,550 and from $7,000 to $7,100 for families.
HSA accounts are available for individuals with high deductible health care plans (many of us these days!). They allow you to make pre-tax contributions and to use these contributions for qualified medical expenses. Essentially you pay your medical expenses with pre-tax dollars.
However, there is another "trick" that you can do to fully leverage these accounts—max out the accounts and use the accounts in the future/in retirement! You see, HSA accounts do NOT expire. Furthermore, they have some characteristics that make them superior to traditional IRAs.
Should you start/use and HSA? I cannot answer that question, as I'm not your advisor. However, I can offer that this is a conversation that you definitely should have with your advisor.
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