Listen up University of Michigan employees!
Are you taking full advantage of the health savings account (HSA) option?
HSAs can be a powerful financial tool. Not just for covering medical expenses, but for long-term savings as well.
Article Contents
What is an HSA?
An HSA is a tax-advantaged account available to employees enrolled in a high-deductible health plan (HDHP). It allows you to set aside pre-tax dollars to pay for qualified medical expenses.
Triple tax benefits
HSAs are unique because they offer three significant tax advantages:
Contributions are tax-deductible
Earnings grow tax-free
Withdrawals for medical expenses are tax-free
This makes them an excellent savings tool for both current healthcare needs and retirement.
Not just for short-term
Unlike flexible spending accounts (FSAs), HSA funds roll over from year to year. If you invest in your HSA, those funds can grow and turn it into a powerful retirement savings tool.
In fact, many financial planners consider HSAs to be as valuable as retirement accounts like 401(k)s or IRAs—especially if you don’t need to use all the funds right away.
Who benefits?
If you have relatively low medical expenses, an HSA allows you to save money on premiums and invest the excess. Over time, this can add up to a significant amount that you can use for healthcare costs in retirement.
Want to catch the full breakdown of HSA benefits in our webinar? Watch the replay for more in-depth tips on how to make the most of all your fantastic U of M benefits!
Important Disclosure: Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pearl Planning, or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to their individual situation, you are encouraged to consult with the professional advisor of your choosing. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at https://pearlplanning.com/. Please Note: Pearly Planning does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Pearl’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a PEARL PLANNING client, please contact PEARL PLANNING, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.