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Health Savings Account

February 28, 2024

Health Savings Account

A powerful tool for financial planning. Do you know the benefits? 30,000ft view.

Who’s eligible?
        - You must be enrolled in a high deductible health plan

Why’s it a powerful tool?

1. Enjoy triple tax benefits
        - Tax deductible contributions, therefore reducing your taxable income for the year
        - Your earnings grow tax free
        - Tax free withdrawals if they are for qualified medical expenses
2. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over indefinitely
3. Investment options: Not all offer, but those that do your options depend on your provider
4. Emergency fund buffer: Your HSA can serve as an emergency fund for unexpected medical expenses providing you more peace of mind
5. Ability to cover qualified medical expenses now and/or later during retirement
6. Help cover long term care insurance premiums in the future
7. An addition to your overall retirement savings strategy adding you more flexibility

Important Facts:

Before 65 years old:
        - Withdrawals are only tax free if for qualified medical expenses. If used for anything else, you’ll face taxes and an additional 20% penalty.

Retirement boosts/benefits for those 65+:
        - Did you know that after age 65 you can withdraw the funds for any purpose (non-medical expenses) PENALTY free?
        - However, withdrawals not used for qualified medical expenses, you will still be subject to income tax.

Make the most of your HSA, it can be more than just a health tool.

Be sure to discuss with a financial advisor and tax professional to see how to implement within your overall financial plan.

Retirement Planning Solutions, LLC is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Retirement Planning Solutions, LLCC by the SEC nor does it indicate that Retirement Planning Solutions, LLC has attained a particular level of skill or ability. This material prepared by Retirement Planning Solutions, LLC is for informational purposes only and is accurate as of the date it was prepared. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Advisory services are only offered to clients or prospective clients where Retirement Planning Solutions, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Retirement Planning Solutions, LLC unless a client service agreement is in place. This material is not intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Retirement Planning Solutions, LLC is not an accounting firm. Please consult with your tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.