“Healthcare costs in the United States can be exorbitant,” Freedom Path Financial wryly notes.It takes only one serious illness or medical emergency to significantly impact not only your own financial security, but ultimately your ability to pass on any kind of financial legacy to loved ones. As noted in an earlier Geyer Law blog post, “Even those with health insurance and those with higher incomes are not immune to the high costs of medical care.”
At Geyer Law, where we stress the importance of not only making your healthcare wishes known through an Advance Directive for Healthcare Decisions document, but also of coordinating any plans to leave assets to heirs with contingency funding for your own present and future healthcare needs.
One planning tool highlighted in a recent issue of the Indianapolis Business Journal is the Health Savings Account. While HSAs are funded via payroll deductions (sometimes with matching contributions from the employer) during your working years, funds not withdrawn may be used to pay health expenses after retirement. The main advantage HSAs have as a mode of planning for healthcare needs in retirement is that they are “triple tax-advantaged”. Whereas funds withdrawn from both IRA and 40lk accounts post-retirement are subject to taxation, there is no income tax on withdrawals from Health Savings Accounts when used to pay qualified expenses, which include, not only hospital fees, but physical therapy, and even dental and eye care costs.
Medical bills can be expensive, and some conditions require ongoing care, and, at Geyer Law, we help clients who may be unable to afford their medical bills without assistance secure Medicaid benefits. But for those who have assets to protect and who wish to leave wealth to the next generation, one not-to-be overlooked aspect of planning is the Health Savings Plan.
– by Ronnie of the Rebecca W. Geyer & Associates blog team
