I meet with clients during their open enrollment periods so that we can discuss their benefits packages. Medical expense is something that comes up often so we discuss Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Why these two? Well, they get used interchangeably, but they are two completely different things. In this episode, I'm going to bullet point the highlights of these two types of accounts that are both designed to help you cover out-of-pocket medical expenses so be sure to listen in.
You will want to hear this episode if you are interested in...
The Health Savings Account (HSA) highlights [0:58]
The Flexible Spending Account (FSA) highlights [2:07]
Using an HSA in retirement [4:09]
The sales tip section: Celebrating the small wins [5:52]
This week’s FLASHBACK [6:39]
When it comes to a Health Savings Account… DO IT!
With the HSA all contributions go in before taxes. The balance then grows tax-free and distributions are not taxed as long as they're used for medical-related expenses. You can only participate in an HSA if you're in a high deductible healthcare plan. At age 55, you can start to contribute an additional $1,000 per year to “catch-up”. There is no use it or lose it with a HSA but once you're enrolled in Medicare you can no longer contribute. For more details on the HSA and how to use it during retirement be sure to check out the episode.
The sales tip section: Celebrating the small wins
Too many of us get so caught up in hitting a massive overall goal that we forget that on the road to completion big goals are made up of many smaller steps. If you’ve been working so hard and for so long toward a goal, you may wonder if you’ll ever get there. Do you ever step back and look at all the little accomplishments that have gotten you closer to the big objective? If not, you should. When I do, I get refreshed. So, be sure to celebrate the small wins along the way!
Replacing one bad decision with another
I had a really nice scholarship for college but I worked all throughout undergrad for spending money. I had this job delivering furniture for a few years and one summer I made a lot of money in bonuses. It was BURNING a hole in my pocket so I decided to have some fun with it. I had wanted a Jeep since I was a kid so my first decision was to test drive one. The day I did it was raining and after a turn sent the Jeep jumping all over the road, I decided maybe a Jeep was a little too dangerous so I bought a motorcycle instead. To hear more about how I traded one bad decision for another listen to the episode!