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HSAs and Retirement
Health care costs are rising for everyone, but as an older adult, you may face more challenges than the general population. For those worried about their financial future and ability to retire, the prospect of future medical care is an additional concern. For instance, aging adults tend to face more chronic conditions and medical problems, leading to higher medical and prescription costs.
HSAs are a growing trend and are often promoted as a valuable money-saving option. You may be wondering if an HSA is a smart option for you based on your unique medical circumstances, especially since once you become eligible for Medicare, you are no longer eligible to contribute to an HSA. Regardless of this, the benefits of an HSA can be substantial for adults nearing retirement age.
An HSA is paired with a high deductible health plan (HDHP). This may concern some older adults with chronic medical conditions, as this involves more out-of-pocket costs than a traditional health plan with a lower deductible. It is important to remember, however, that the HSA provides a valuable savings component that can either be used to pay for out-of-pocket costs tax-free or to save money for the future. Here are some advantages of an HSA:
It is also important to be aware of potential drawbacks. If you have many out-of-pocket medical expenses, you may struggle to use your HSA for retirement savings since you will be using the funds for your current bills. In addition, the desire to take advantage of the HSA as a savings tool may lead some individuals to forgo medical care or prescription drugs that they need. This is never a good idea, as it can lead to more expensive and serious medical complications down the road.
If you are considering an HSA, examine the benefits and potential risks and be sure to discuss with your family. Contact HR if you have more questions about our HSA offering.
Marty Thomas
Marty has spent most of the last 20 years developing software in the marketing space and creating pathways for software systems to talk to each other with high efficiency. He heads our digital marketing efforts as well as oversees any technology implementations for our clients. As a partner, Marty is also responsible for internal systems in which help our team communicates with each other and our clients.