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Finance What is the deal with Health Savings Accounts? It used to be a use it or lose it plan, but in 2004, President Bush changed the parameters on Health Saving Accounts. By allowing people to retain and roll over money that they didn’t spend on their healthcare, health coverage can now be used for wealth accumulation in your overall financial picture. HSA’s combine high-deductible medical insurance with a side fund that provides a tax deduction for contributions, tax deferred investment growth, and tax free ultimate dispersal, provided funds are spent on qualified medical expenses. HSA’s provide more health care options, especially for entrepreneurs and the self employed. Here are some questions that we often get: Can you invest your HSA funds? HSAs typically offer several savings and investments options. These may include interest-earning savings, checking and money market accounts, or investments such as stocks, bonds, and mutual funds that offer the potential to earn higher returns but carry more risk (including the loss of principal). Make sure that you carefully consider the investment objectives, risks, charges and expenses associated with each option before investing. A financial professional can help you decide which savings or investment options are appropriate. How can an HSA help you save on taxes? HSAs offer several valuable tax benefits:
How much can you contribute to an HSA? Each year, you can contribute up to $2850 for individual coverage and $5,650 for family coverage (for 2007). This limit applies to all contributions, whether they’re made by you, your employer or your family members. To learn more about how you can use a Health Savings Account in your overall financial picture, contact Neal Weaver or Todd Kading at (512) 231-8180 |
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