If you’ve ever had a Zoom call with me

you know that I love to say “Health is Wealth." You know what a big part of health is? Security. Savings. It's not having to worry or be anxious. Enter the beloved H.S.A.

HSA

Health Savings Accounts (HSAs) are designed for use alongside high-deductible health plans, assisting you in covering your medical expenses. They can also function as an incredible retirement account due to their triple tax benefit:
• You can deduct contributions from your taxes.
• Your account balance grows without being taxed.
• Withdrawals for medical expenses are tax-free.

After age 65

You can use the monies for non-medical purposes, in the same way you can with a traditional IRA, and pay taxes at ordinary income rates but without penalties. We recommend that you fully fund your HSA each year until you enroll in Medicare which ideally minimizes distributions. By doing so, even if you start at age 50, you could
accumulate $200,000 or more by the time you reach age 65.

HSA RULE

There's a special, lesser-known rule that will assist you in funding your HSA. You can roll over funds from your IRA to your HSA once in your lifetime through a qualified HSA funding distribution. The rollover amount is limited to your HSA contribution limit for the year. In 2023, this amounts to $3,850 for individual coverage and $7,750 for family coverage. If you are over age 55, you can add a $1,000 catch-up contribution. The rollover amount doesn’t count as income, isn’t deductible, and reduces the amount you can contribute to your HSA for the year. The big benefit is that you turn this otherwise taxable money into tax-free money when you use it for medical expenses.