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HSAs – Have it Your Way! Maximize Tax-Free Savings for Retirement or Health Care

We believe that HSAs may be the most overlooked retirement savings account. Many individuals now have high deductible health insurance plans coupled with a Health Savings Account that they, their employers, or a combination of both, can contribute to annually. For 2012, the contribution limits are $3,100 for a single person and $6,250 for a family. There is also a catch-up provision which allows individuals over the age of 55 to contribute an additional $1,000.

HSA funds can be used tax-free for qualified medical expenses, and any funds that are not used during the calendar year roll over to the following year. Money withdrawn for non-medical reasons is subject to income tax in addition to a 10% penalty. If you become disabled or reach age 65 the penalty no longer exists but you still have to pay income tax on the money.

The HSA offers individuals a tax deduction for the contributions, and if used for qualified medical expenses, tax-free growth on the earnings. There is also no expiration date for using the funds. HSA accounts can be invested, so for the individuals who can afford to pay for health care expenses with other cash flow resources, the HSA could be left untouched for years of tax-free growth. It could even be seen as a way to pre-fund retiree health care expenses in a super-charged way: deduction up front AND tax-free growth!

For a full list of qualified medical expenses see IRS Publication 502.

 

Important Disclosure Information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable. Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request. This information is not a substitute for personalized advice from RegentAtlantic. This information is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

This information is based on our understanding of the current law that is subject to change. RegentAtlantic does not provide tax advice. Please consult with your tax advisor prior to implementing any of the strategies discussed.

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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