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Three Words That Will Save You Money on Health Care Expenses: Health Savings Account

Many of you will be asked by your employers to choose your benefits for the coming years within the next couple of months. I'm Laura Rotter from True Abundance Advisors, and I'm here to share the frustration that we all have that here in the United States we have one of the most complicated healthcare systems in the world.

It is no wonder that I turn to my children, one of whom works for a very large insurance company, helping special needs families navigate our healthcare system. I turn to them for help when I'm helping my clients make their decisions. But there is one often overlooked gem offered by your employer. What is that?

You may wonder. It's a health savings account. What's a health savings account? It's an account that gives you the ability to take out money from your salary pre-tax to put towards qualified healthcare expenses. Well, you might tell me I'm already using an fsa, a flexible spending account, and I take money out pre-tax, and I use it towards my healthcare expenses, not so fast.

There's quite a big difference between an FSA and an HSA, an FSA, as I'm sure you know, you have to specify how much money at the beginning of the year you'll be putting in. And then you either use it or lose it. A health savings account. On the other hand, first of all, it's portable, so if you leave your employer, it comes with you and it's a triple tax-free bonanza.

You take out money pre-tax. That money can then be invested within the health savings account and grow without being taxed. And then finally, when you withdraw that money, which can be many years later, I mean, frankly, you can withdraw the money when you're in your sixties to pay your Medicare premiums.

And when you withdraw that money to use towards qualified medical expenses, unlike the 401k, even then the monies are not taxed. Wow, it sounds great. So you might be asking what's the catch? And of course, there's always a catch. In order to qualify. To enroll in a health savings account, you have to be in a high deductible healthcare plan.

So certainly before choosing this plan, make sure it makes sense for you and your family's healthcare expenses. I'd be happy to answer any individual questions you might have. Please reach out to me, Laura, l a u r a, at true abundance advisors.com, and I'd be happy to have a chat with you about this and other areas of your financial life so you can be living your life on purpose.

Thank you so much for watching.