By: Mark Strand, VP Senior Trust Officer
Health care expenses are now seen as a critical component of a holistic retirement savings strategy. As health care costs have risen, those costs have become a significant concern for employees and employers. Enter Health Savings Accounts (HSAs), which have increased in popularity with assets of approximately $82 Billion at the end of 2020.
Did you know that HSA funds can be invested similar to your 401(k) plan? If you do not use it, you do not lose it. Some HSA owners choose to invest their HSA dollars similar to their 401(k) dollars with plans of not using until after age 65 to pay for qualified medical expenses.
Did you know more employees are utilizing HSAs as a retirement savings strategy allowing for Tax-Free, penalty free distributions after age 65? Age 65 general distributions are tax-free for any reason. In order for withdrawals to be both tax-free and penalty-free, the distributions must be for qualified medical expenses.
Whether you are an employer or an employee, you should be aware of the rules and usage of HSAs and how they may benefit both employees and employers as well as retirees.
At First Western Bank & Trust, we provide individual and group HSA plans. Contact us today at 701-364-9006.