August 27, 2017


How to Pick the Best HSA for You (Gail MarksJarvis, 8/26/17, Chicago Tribune)

If you're on a high-deductible health insurance plan, you'll initially pay many of your health care costs out of pocket. The insurer won't start paying your doctor and hospital bills until after you've spent a lot -- at least $1,300 if you are single or $2,600 for a family. And even after reaching those sums, you can encounter big costs such as covering copayments.

If paying those types of sums out of pocket would be unmanageable, the high deductible insurance policy probably isn't for you.

To calculate whether a high deductible insurance plan or another option offered by your employer makes more sense financially, try a calculator such as

If the HSA/high deductible insurance combination sounds like it could work for you, there are some solid reasons to start using it as a savings vehicle.

Having an HSA can be an excellent way to enhance your retirement funds. Putting as much as possible into a 401(k) is important because it can go toward paying for all sorts of retirement needs, including food, housing and health expenses.

But since many people can't save enough in 401(k)s or IRAs to adequately cover their retirement, an HSA can be an extra help. It can help pay for your health care costs in retirement, which can total a hefty sum.

Fidelity has estimated a 65-year-old couple should expect to pay $260,000 for health care in retirement. HSA savings can be used tax-free to pay for Medicare premiums and long-term care insurance. After age 65, an HSA can also be used for other expenses, but if you spend on something other than health care the money will be taxed like income.

On the other hand, an advantage of HSAs is the tax treatment they are given; Uncle Sam gives you a break on taxes when you save in an HSA.

Money you put into the account isn't taxed, money that stays in the account isn't taxed and money you take out to pay for medical costs isn't taxed. That's a good deal. Because you aren't taxed, every penny you save will count a lot more than if it was sitting in a regular savings account.

Posted by at August 27, 2017 7:51 AM