A Health Savings Account (HSA) could be your ticket to offset retirement healthcare costs
Health Savings Accounts have been around for a long time, but are only recently catching on as an excellent way to deal with the ever-increasing costs of healthcare in retirement. The basic concept is pretty simple: While you are working and before you go on Medicare, you can contribute pre-tax dollars to your HSA and have them accumulate investment value similar to any other retirement instrument such as a 401(k) or Roth IRA. That investment can then be withdrawn tax free to pay for any future healthcare expenses you may have. Saving for future healthcare expenses is especially smart considering that healthcare is usually the single biggest expense most retirees have to deal with. And while you can no longer contribute to an HSA once you enroll in Medicare, you can continue to withdraw from your HSA to pay for your medical expenses, even after you have stopped contributing. That makes an HSA a pretty smart retirement move, as this Barron’s article by Reshma Kapedia explains. Click here to read more.