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July 16, 2005
Health Savings Accounts are best Retirement Vehicle
Jay Coldwell, product director for Wausau Benefits, was recently quoted in an article in Employee Benefit Advisor as saying “I think the best use of a Health Savings Account (HSA) is as a retiremenet accumulation vehicle because it’s the most tax-advantaged vehicle. Everyone will need significant assets to pay for health care in retirement.”
This is the great advantage HSAs have over other retirement vehicles like IRAs. Though they both can grow tax-deferred, only HSAs allow you to spend the money without paying taxes when you make your withdrawals. The only catch is that the expenses must be medically related. Since so many medical expenses tend to happen once people do reach “old age”, a good portion of your HSA funds may be withdrawn tax-free. If you do have to pay taxes on your withdrawal, it just means you aren’t needing the money for medical expenses. This is a win-win situation for you.
Posted by Wiley Long at July 16, 2005 10:16 AM