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[STUDY] Maximizing the Benefits of an HSA

Darryl Rosen • Mar 12, 2023

Health Savings Accounts (HSAs) are loved by investors due to their ‘triple tax advantage’ (tax-deductible contributions, tax-deferred growth, and tax-free withdrawals for qualified medical expenses),

Unfortunately, a new study from the Employee Benefit Research Institute (EBRI) suggests that those with HSAs are not necessarily taking advantage of all of the possible benefits the accounts offer and are leaving money on the table.

They looked at a database with more than 13 million HSAs and found that average contributions in 2021 were $4,527 less than the statutory maximum contribution for accountholders with family coverage (which was $7,200 in 2021) and $927 below the maximum for individuals ($3,600 in 2021), which greatly limited what these accounts could amass over time.

Further, only 12% of accountholders invested in assets other than cash, limiting the tax-deferred growth benefits HSAs offer.

There's more.

Just over half of accountholders withdrew funds from the account, further limiting the potential for tax-deferred compound growth in their accounts. One suggestion I make to my clients is not to use the account for current medical expenses if you have other funds..This will leave more money for medical expenses in retirement.

So keep making those contributions and if you don’t use the money right away - not to worry! An HSA does not have a “use it or lose it” provision like the Flexible Spending Account (FSA). As long as the funds were permitted to be contributed into the HSA in the first place, the funds can remain in the account for an extended period of time.

So...

Put in the max!
Let it grow in assets other than cash!
Try not to use it!

You'll be maximizing this wonderful tax saving vehicle!

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When a Spouse Dies

By Darryl Rosen • 19 Mar, 2024

When your spouse dies. 63% of the time when a spouse dies, it’s the man. According to the NIH, when this happens, on average the widow (or the wife) lives another 12 years. 3 things happen in short order when someone dies. Income decreases by as much as 50% with the possible loss of social security and pension. Taxes increase the following year because single tax rates are more punishing than married rates. If the deceased had an IRA or 401K, the widow still has to take Required min distributions but now at higher tax rates. Expenses go down but not by as much as you think. Only 20% on average per the Government Accountability Office. Think about it this way. Variable costs like medical and food, etc. will decrease but what about fixed expenses. My FIL passed in December. Jill’s Mom still has the house to contend with. All of this is to say please build these types of scenarios into your plans. If you have questions, feel free schedule some time to speak with me.

Annuities Simplified: What you need to know before buying!

By Darryl Rosen • 07 Mar, 2024

Are you looking for a reliable source of income in retirement? Annuities may be the answer! Watch this video to learn how annuities can provide guaranteed income and simplify your retirement plan. Say goodbye to financial worry and hello to a comfortable retirement!

Overcoming Financial Blunders

By Darryl Rosen • 02 Mar, 2024

Are past financial slip-ups haunting your investment decisions? You're not alone. In this insightful video, @erinkennedytv and Darryl delve into expert advice on navigating investment and financial choices after making mistakes. From acknowledging past blunders to crafting a brighter financial future, discover actionable strategies to thrive in your retirement journey.

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Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and Rose Advisory Group are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. The content of this website is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. Fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a monthly fee for assets under management while insurance products pay a commission, which may result in a conflict of interest regarding compensation. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by BCM. Index or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract.