In the face of high deductible health insurance plans and rising healthcare costs, Americans should do their best to devise ways to save money on healthcare premiums and out-of-pocket expenses. One of the best methods of preparing for potential healthcare expenses is a health savings account. Unfortunately, it’s also one of the least-utilized health insurance tools despite several notable benefits:
Improved Tax Savings
In addition to lower premiums when compared to traditional health plan options, HSAs offer tax deductible contributions up to $3,050 for individuals and $6,150 for family accounts. The savings in these accounts can also grow tax-free and any money you withdraw for medical expenses are exempt from income tax.
Savings for the Future
HSA savings are ideal tools for long-term healthcare planning for post-retirement use. Persons over the age of 55 can also deposit an additional $1,000 per year to their HSAs, but deposits are no longer allowed after age 65.
Increased Flexibility
Because you control how much you deposit into your HSA up to the legal limit, setting up a health savings account is a great way to plan for a secondary retirement fund if you’re maxing out your 401(k) or IRA plans. HSAs also allow you to choose whether you’ll pay for medical expenses directly from that account or reimburse yourself for medical expenses later. You can also choose the financial institution and whether or not you want to invest a portion of those funds in a mutual fund for greater growth in the future.
For help navigating the health insurance benefits world, contact the team at Mutual Benefits Inc. Whether you’re shopping for health coverage for the first time or simply want a second set of eyes on your existing plan, we can help you separate fact from fiction and equip you with a plan to fit your needs and your budget. Contact us today!
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