By Todd I. Youngdahl, CFP®
You may have heard about the benefits of utilizing various tax-advantaged medical savings accounts to save for medical, dental, prescription, or vision expenses. Many employers offer more than one type of these accounts, leaving employees with questions about which one to choose. Read on to learn about three options, and the benefits of each.
By Maura Schauss, CFP® and Todd Youngdahl, CFP®
Planning for your healthcare costs in retirement is one of the most important moves you can make. Most people receive healthcare coverage through their employers, which will end when they retire. Many are eligible to receive Medicare at age 65, so there are things you need to know to be ready to enroll, including the enrollment process, coverage options, and what healthcare expenses Medicare doesn’t cover.
In 2003, the government established Health Savings Accounts (HSAs) as a way for people covered under high-deductible health plans (HDHPs) to get special tax treatment towards saving money for medical expenses not paid for by their insurance. With an HSA, payers were able to receive a tax benefit for saving money to cover their deductible. As HDHPs gained popularity, the government wanted to incentivize saving to cover the higher deductibles, so that medical events would not be financially devastating for those with insurance in place. HSAs offer two important benefits to consider.