Tap An Hsa To Cover Post - retirement Medical Expenses
Tap an HSA to Cover Post - Retirement Medical Expenses
As U. S. health care costs project to climb to unprecedented heights, Health Savings Accounts ( HSAs ) are growing increasingly popular throughout the nation. Created beneath the Medicare Modernization Act of 2003, HSAs allow consumers to use tax - free savings to cover medical costs while giving them more control over their health care coverage.
Attractive features
HSAs offer many helpful advantages. For one, HSA account holders can choose their own doctors and even shop around for the best deal on medical services. Plus, HSAs offer some relevant tax turn. Contributions to an HSA plan are tax deductible, and there are no taxes on HSA investment improvement or withdrawals, so long as the money goes towards qualified medical expenses.
Additionally, unlike Flexible Spending Accounts that have a use it or lose it arrest, funds in an HSA roll over from one year to the next. This allows HSA owners to accumulate a sizable pool of money over the years which can be next in rags after retirement.
Powerful enough for post - retirement?
While HSAs are powerful plans, the jury is still out on whether these accounts can resources all of a persons post - retirement health care expenses. Most consumers dont apprehend just how much money theyll need to cover health care expenses after retirement.
Although Medicare helps pay for many senior health care costs, these contributions dont come close to tarpaulin all of a retirees medical expenses. Most seniors end up paying an exorbitant amount of money out of their own pockets.
As a matter of truth, a recent Mad for Investments study shows that a couple deferential today at the age of 65 would need $225, 000 to pay for extended health care expenses during their retirement. That figure doesnt even bear long - term care expenses. Not to mention that this amount will continue to rise along with inflationso future retirees will have to pay even more.
Considering these numbers, its doubtful that an HSA can money your entire post - retirement health - care tab. However, with some clever planning, you can certainly cover a big portion of your after retirement medical expenses with an HSA.
Here are a few tips for maximizing the potential of your HSA:
Start little: The younger you are when you start contributing to an HSA, the better off youll be in post - retirement years.
Dont use HSA funds until after retirement: While you may be tempted to withdraw funds from your HSA to cover current medical expenses, try to find extended way to pay for these costs. If you green light these funds in your HSA, youll accumulate hobby and investment returnswhich means youll have more money to cover health care costs in your older years when you need it most.
Wait until youre 65: Once you turn 65, you can use HSA funds for non - health care expenses as well without paying a creed. These withdrawals are smartly taxed as income, much equal funds taken from a 401 ( k ).
While these accounts certainly offer many benefits, an HSA may or may not make sense for you. You may want to talk with a financial able to drive if an HSA could help you money post - retirement medical expenses.
What ' s Up Doc - End the Best Doctor for You and Your Health Insurance
When you sign up for new health insurance coverage, its extraordinarily important to select the best primary doctor for you and your health plan. Not only do you want to select a competent, experienced doctor who will indulge you with exceptional medical care, but you also need to assure that he or teenybopper will store health care services as prerequisite underneath your insurance policy.
Although you may be tempted to plainly choose the doctor with the office beside to your work or home, you should not take this adjudication lightly. Choosing the best doctor requires a great deal of research. Take the time to surveillance into your lurking doctors credentials and find out how well they work with your especial type of insurance plan. After all, your incarnate and financial health could depend on it.
Different plans, different doctors
If your health insurance plan is an HMO or PPO, youll conventional be slight in your choice of doctors. These plans typically line a list of network approved doctors from which you can choose your primary physician.
However, you can repeatedly choose someone outside of your health plans network at an additional cost. If you patter find a considerate doctor within your network, it may be worth the aggrandized monetary worth to do this.
Pinpointing the best doc
Here are a few steps you can take to find the most desired doctor for your unique healthcare wants and needs:
Get recommendations: Ask friends, family members and coworkers if they can recommend a doctor. If people you know and sureness have been happy with a doctors care, the odds are that youll be up too.
Consider plan out of network: Even if a friend recommends a doctor who is outside of your health insurance network, you should add that doctor to the list of approved doctors you are considering. Check into all of these doctorsit may be worth the higher price tag to use an out - of - network doctor if no one within the network suits your needs.
Research credentials: Once you have a list of inherent doctors, call each doctors office and hunt for about their education, training and experience. You may also want to ask about specific qualities that you are seeking in a doctor. For example, if you lift a woman as opposed to a man, a doctor of a certain age or religion or even a doctor who attended a certain type of school, you should ask all of these questions.
Check with medical associations: You may also consider determination more information about prepatent doctors from the American Board of Medical Specialties ( ABMS ) or The American Medical Association ( AMA ). These associations offer expert information about doctors throughout the country. Visit the ABMS website at www. abms. org and the AMS website at www. ama - assn. org / aps. amahg.
Find out if theyre board certified: Although doctors are not required to be board certified, this is important to some patients. Doctors have to complete fresh years of training in a specialty and pass an exam in order to be board certified. You can call the ABMS at 1 - 800 - 776 - 2378 or visit their website at www. abms. org learn more about board certification.
Learn about complaints: You may also want to contact your state department of insurance to find out if any complaints have been filed against your embryonic doctor.
Meet face - to - face: Once you have narrowed down your list of doctors, you should set up an introductory appointment with each of them. Although some support charge a small fee for these types of visits, its well worth it. This will grant you to get a touch for the doctors personality and ask him or her questions first - hand.
