Consumer Directed Healthcare

Financial Advisors continue to offer their advice on how much we all need to retire. What we need to look at in more detail is where our money will be spent. The reality is that a large portion of your nest egg will be need for prescriptions and doctor visits. According to the Employee Benefit Research Institute, that amount is almost $300,000 for a couple after retirement!

When planning for retirement and the inevitable health care associated costs, the long range benefits of having a fully funded Health Savings Account (HSA) will prove fruitful when you hang up your work boots. As suggested in this May 21, 2007 article from Newsweek, let the contributions build early enough and don’t touch them. By doing this you will have accumulated a fund that is absolutely tax-free to use for your Qualified Medical Expenses at a later date. Did I mention that it was tax-free?

This scenario is only one possibility for utilizing the benefits of an HSA. I understand that it would be difficult for some to leave their HSA account untouched and pay for more of their medical expenses out of their own pocket. What we need to continue to recognize is that there are options for individuals and families outside of traditional retirement vehicles.