3 Compelling Reasons to Use an HSA to Benefit Your Finances
Save money on both taxes and health insurance premiums? Yes, please!
Health Savings Accounts (HSA's) are tax-advantaged medical savings accounts available to individuals (and employees) who are enrolled in high-deductible health insurance plans. These high deductible plans generally have lower monthly premiums.
There are many tax advantages to HSA's including:
- when you contribute
- no tax on growth
- no taxation on withdrawals (as long as they're used for health expenses)
What is the contribution limit for HSA's in 2017?
In 2017, you can contribute $3,400 for yourself or up to $6,750 for a family. These contributions are made pretax, meaning they reduce your taxable income. As a recent Forbes article points out, employers view HSAs as a significant part of a successful retirement benefits strategy.
However, a recent study reveals that consumers aren't maximizing the benefits of HSA's. It found that in 2016, fewer than half of people with HSA's deposited any money in them. "The average total account contribution, including both employer and employee deposits, was $2,922, significantly lower than the maximum allowable contribution..." for family coverage or individuals.
Hopefully Congress will keep HSA's as part of any health reform overhaul moving forward since it can benefit those saving for retirement.
HSA's are very relevant and helpful to your financial life, but if you don't want to deal with the details, just give us a call to help you figure out the options if you are self-employed or work for a small business.