Advantages of a Health Savings Account (HSA)

How Health Savings Accounts Can Support Retirement Savings

When planning for retirement, it is easy to focus on the fun parts like travel or hobbies, but one of the biggest expenses many people face is healthcare.

Costs continue to rise, and one estimate suggests that individuals may need over $170,000 for medical expenses in retirement.[1]

That is where a Health Savings Account, or HSA, can play an important role.

What makes Health Savings Accounts so valuable

Health Savings Accounts offer a way to save for both current and future medical expenses.

Here are a few key benefits:

• Contributions can be made pre-tax or may be tax-deductible.
• Your savings balance can grow over time, including interest or investment earnings.
• Withdrawals for qualified medical expenses are tax-free.

This combination is often referred to as a “triple tax advantage,” which make HSAs a powerful savings tool.

Another important feature is flexibility. Any unused funds roll over each year, so you do not lose what you do not spend. Over time, this helps build a dedicated savings pool for healthcare costs.

Guide to HSAs

How an HSA works alongside your retirement plan

An HSA is not a replacement for your 401(k), but it can complement it. Your 401(k) is designed to help cover everyday living expenses in retirement. On the other hand, an HSA can help you prepare for healthcare costs both now and in the future.

Frank P. Zocco, Jr., CFP®, AIF®, CRPS®
Partner
Jacobs Financial Partners, LLC
95 Glastonbury Blvd, Suite 210
Glastonbury, CT  06033
(860) 657-8757

www.JacobsFinancialPartners.com
Frank@jacobsfinancialpartners.com

Investment Adviser Representative offering securities through Cetera Wealth Services, LLC, member FINRA/SIPC. Advisory services offered through Cetera Investment Advisers LLC, a Registered Investment Adviser. Cetera is under separate ownership from any other named entity. 

Distributions from traditional IRA's and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty. All investing involves risk, including the possible loss of principal.  There is no assurance that any investment strategy will be successful. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Wealth Services LLC nor any of its representatives may give legal or tax advice.

Information is provided by Frank Zocco and written by 401(k) Marketing LLC, a non-affiliate of Cetera Wealth Services, LLC. The opinions are those of the writer, and not the recommendations or responsibility of Cetera Wealth Services, LLC or its representatives.