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Friday April 18th 2014

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HSAs Gain Strength As Crucial Retirement Planning Tool

nesteggMost retirees will spend an average $250,000 in out-of-pocket health costs during their retirement years, seriously cutting into their nest egg. The flexibility of HSAs and the tax advantages they offer may afford many workers the ability to contribute to their future health needs over their working careers and amass enough wealth to help chip away at their out-of-pocket expenditures. This may be particularly important when workers begin paying Medicare premiums, which are likely to rise when retirees are required to take minimum distributions from tax-advantaged retirement accounts, according to Investment News. Required minimum distributions from tax-qualified retirement plans, pensions and Social Security can trigger an increase in income that results in permanent Medicare premium hikes. As HSAs are tax-free income sources when distributions are used to cover qualified medical expenses, the use of them may help workers cover their costs and premium payments according to a recent report at www.algeus.com.