You might want to include a Health Savings Account (HSA) as part of your retirement plan.

An HSA is designed to allow you to make tax exempt contributions to pay for your own health expenses – for now and also for the future. As long as the funds are used to pay for qualified medical expenses, you aren’t taxed on the distributions.

That certainly helps during your later working years, by stretching your healthcare dollars further while you are still working. It can be an even more significant part of your retirement years. Health care costs are high today, and they’re only expected to rise even more in the future.

Not everyone qualifies for a Health Savings Account. Among other specific qualifications, you must:

• be covered under a High Deductible Health Plan (HDHP)
• not be currently enrolled in Medicare
• not be eligible to be claimed as a dependent on someone else’s tax return

If your employer offers an HSA plan as a benefit, you might want to consider placing some of your earnings there to help with health care costs during your retirement years. There are limits to how much you can contribute, so starting early, as with all retirement savings, is a good idea.

In 2018, the contribution limit for a single person is $3,450, and for a family it is $6,900. If you are 55 years of age or older, you can make an additional catch-up contribution of $1,000 this year.

That’s really not much, considering the average 65+ year-old retiree today should expect to pay around $5,000 a year on health care premiums and out-of-pocket expenses. But it does help your earnings to cover more of your medical expenses when you haven’t had to pay income tax on those dollars before you spend them. And having that money previously set aside for healthcare expenses when you are no longer working means you have more left to spend on everything else during your retirement!

Saving wisely to cover all of the health care expenses you can reasonably expect to face during your retirement years is just one of the many facets of a good financial plan. James Holloway Sr. and the rest of the team of financial professionals at Texas Financial and Retirement can help you to carefully evaluate the financial needs of your retirement. They’ll take a good look at your current financial picture and pay close attention to learning what is important to you during your retirement years, then they will assist you in developing a personalized financial plan for arriving at, and continuing through, your retirement.

Contact Texas Financial and Retirement today at bestclients@texasfinancialandretirement.com or 903-534-5477 to learn if you qualify for a free initial visit and consultation. No matter your age or the current state of your health, developing a written plan and following it can help you to maximize your retirement years and minimize the tax burden on your heirs.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Texas Financial and Retirement, Inc. are not affiliated companies. Investing involves risk, including the potential loss of principal.  Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.641524