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Are your clients maximizing their HSAs?

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Most consumers aren't using HSAs as a retirement vehicle

According to a new survey released by Nationwide Retirement Institute, four in ten consumers with access to a Health Savings Account are not taking advantage of it, and 65 percent of those who have an HSA aren’t using it as an investment vehicle.

With healthcare costs in retirement becoming a bigger concern for Americans at every income level, financial advisors have an opportunity to ensure that clients eligible for HSAs are maximizing these accounts.

Clients with HSA-eligible health plans can contribute $3,450 per year as an individual and $6,900 as a family. Consumers over 55 years old can contribute an extra $1,000.

It is generally recommended that consumers maintain a balance equal to their health plan’s out-of-pocket maximum in their HSA in the event they hit this threshold, but funds above that figure can be invested.

HSAs funds have a triple tax advantage - contributions are made tax-free, no capital gains taxes are applied, and the money can also be spent on qualified medical expenses tax-free.

As a result, these funds can grow significantly, providing another source of retirement peace of mind. However, most consumers aren’t aware that HSAs can be used as a retirement vehicle.

More and more financial advisors are providing clients with healthcare and health insurance advisory services as part of comprehensive wealth management. To learn more about Bernard Health’s Healthcare Extension, click below.

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