Retirement Accounts Under Scrutiny – IRS Makes BIG Changes
(NewsBroadcast.com) – The IRS made it easier for Americans to save for unexpected health care costs as well as potentially add to their retirement nest egg with its revised tax inflation adjustment schedule. Along with adjustments to things like the standard deductions, personal exemption, and marginal tax rates, the amount a person or family can save ticked up as well.
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Health Savings Accounts (HSAs) are a great way to offset healthcare costs. Money invested in them is free from federal income tax. Uses for HSA funds include any healthcare-related expense, including deductibles. Used for those purposes, there are no tax penalties for withdrawal. As an added bonus, HSAs become 100% available, tax-free, at age 65, just like a typical retirement account. Now, with the increase in inflation, Americans can save even more while spending less on healthcare up front.
The individual limit for an HSA is $3,650 per year per. Those who want to keep their health insurance premiums lower and opt for high-deductible plans can now save an extra $200 annually for $3,850 total. A plan is considered high-deductible at $1,500 for an individual or $3,000 for a family.
Saving for the future while safeguarding against potentially devastating unexpected heath crises may make investing with an HSA a good idea for those looking to diversify as well. The plans can be invested and earn tax-free returns as well.
If you have questions on how to plan for retirement, contact a financial advisor that specializes in retirement planning before you make a move.
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