Is your HSA helping you save for healthcare costs in retirement?
One of the most common questions we get is, “How do I prepare for my healthcare costs in retirement?”
Many are surprised to hear the answer can be three little letters: HSA.
Health Savings Accounts (HSAs) can be powerful tools when it comes to paying for healthcare costs because they are specially designed to lighten your tax burden in three different ways. Money goes in on a tax-deductible basis, grows on a tax-deferred basis, and can be spent tax-free as well, so long as it’s spent on qualified medical expenses (including Medicare premiums).
An HSA provides not only a tax-efficient way to save for today’s healthcare expenses — you can also invest your HSA and let the money grow over time, similar to your retirement plan investments.
This gives investments held in an HSA an advantage over other forms of retirement planning accounts – not even your IRA account lets you save this much on taxes. The big restriction is that your HSA account must be used for qualifying expenses, namely, healthcare. But, according to Fidelity’s estimates, the average couple will need $295,000 in today’s dollars for medical care in retirement.
If you’re going to need that much money just for medical costs, you may want to consider a dedicated account for it. Choosing an HSA as your dedicated account for future healthcare costs could make sense under the right circumstances. An HSA may even help you save on your current taxes.
Professional help can make a difference.
HSAs can be useful tools when planning for retirement, but many people don’t know they can invest within an HSA.
It’s no surprise. There is nothing easy about managing your life savings. Your human emotions naturally come into play and drive you to want to buy and sell investments at the wrong times.
That’s where having a professional by your side is so valuable.
An Affordable Monthly Subscription
Fortunately, you can keep your HSA working for you for a lot less than you may expect. With Scarborough Capital Management, you can have your account managed by an experienced professional, with unlimited support, starting at about $1 a day.
How Does It Work?
The financial industry is known for making things confusing. We don’t operate that way. Scarborough advisors partner with Retirement Management Systems (RMS) to provide you Savings Plan Management services. Here’s what you can expect:
- Your Scarborough advisor will listen first, so we can learn about your financial needs, goals, and ability to tolerate risk. Then, he or she will work with you to create a customized retirement healthcare savings strategy just for you.
- Savings Plan Management services are administered by Retirement Management Services (RMS). RMS will first analyze your HSA’s options. They’ll construct a custom asset allocation strategy using the investments available within your plan, allocate according to your Scarborough advisor’s risk profile recommendations, and rebalance as needed.
- Your account will be adjusted as needed, so it is managed in accordance with the strategy agreed upon with your Scarborough advisor.
- You’ll get an action plan that tells you what contribution rates are needed to stay on track with your goals.
- Your advisor will help you monitor your progress along the way and adjust your plan if your personal circumstances change.
- Your account will be periodically rebalanced to ensure that you aren’t taking too much or too little risk.
- You’ll receive unlimited access to your advisor by email or phone.
- You’ll get access to free educational seminars and receive a free subscription to your advisor’s weekly financial newsletter.
There’s nothing magical about building wealth, but the execution is the key. With our services, you’ll have an advisor who will keep you accountable for your own goals. That can help you plan for a more confident future.
What Does It Cost?
Assets $0 - $99,999
Assets $100,000 - $499,999
Assets $500,000 and Over
With these flat fees, you’ll always know exactly how much the service costs. And you’ll never get a surprise bill from us. Learn more about our No Surprises fee policy.
Q. How can I follow what you are doing?
You need to know where your money is at all times, so you’ll continue to have full access to your workplace login and see your holdings and balances.
Q. Am I stuck in a contract if I don’t like the service?
No, you can cancel this service at any time. We want satisfied clients and we think you’ll find the service so helpful and anxiety-relieving you’ll want to stick around!
Q. Do I need to move my account?
No, there’s no change required. As long as online access to your plan information is available we can help.
Q. What if Scarborough is already managing my 401(k) account?
Great! By also signing up for our HSA management services you will qualify for family pricing which will reduce the fees for both your 401(k) and HSA management services by $60 each.