Every year, very few HSA accountholders take advantage of the ability to invest their HSA funds - as high as 12%! Even though every year, for the past five years, the share of accountholders investing has increased, many are still not utilizing this option to reach their financial goals. Check out this week’s blog to learn about the other 2 ways to reaching financial goals with the HSA!
The Health Savings Account (HSA) is a personal savings account designed to help individuals save and pay for qualified health care expenses. Employees use the HSA funds to pay for thousands of eligible items such as copays, over-the-counter medications, dental, vision, and more with tax-free dollars making it an excellent tax benefit to help make the most of every health care dollar.
The BASE® HSA not only allows employees to pay for their health care expenses; but allows for the opportunity to save for the future, invest funds to build wealth, and create a powerful tool for a retirement portfolio.
How are financial goals met with a Health Savings Account (HSA) in place? Check out these 3 ways below:
1). Max Out HSA Contributions.
With health care costs and costs of living on the rise, saving for retirement is more important than ever. Each year, if individuals can max out HSA contributions within the IRS limits, it will easily allow funds to grow over time with triple tax advantages. Because funds carry over from year to year, there is no risk of losing those funds at the end of the plan year. BASE offers clients the My HSA Planner tool to help participants determine the right amount to contribute funds based on income and goals. This educational tool presents personalized calculations such as future savings balance, potential retirement balance, and projections based on participants contribution levels, just by entering in basic information.
2). Set and Monitor Savings Goals.
It is vital that goals set are achievable and realistic. But also important is monitoring those goals. HSA contribution amounts are flexible and can be changed at any time during the plan year while post-tax contributions can be made at any time. It is best for individuals to check in on HSA status each quarter to see if you are working towards that goal.
3). Invest HSA Funds.
Investing HSA funds can make money grow faster, tax-free, and help supplement the long-term goals while saving for retirement. Most people with active HSAs do not take advantage of this opportunity, stating that in 2020, only 6% were investing their HSA balances.
This year marks the 20th anniversary of HSAs, with National HSA Awareness Day on October 15th, which is a significant milestone in the life of these accounts. Tens of millions of Americans can save, through their employer, for current and future health care needs and be more educated on making health care decisions. Each year, the HSA can be a powerful tool to help pay for eligible out-of-pocket health care expenses while also being a powerful tool to achieve financial success in the future.
For more information on the BASE® Health Savings Account (HSA), contact BASE® at 888.386.9680 or visit www.BASEonline.com.