What are some common mistakes to avoid when saving for future medical costs?

Participate in a Health Savings Account (HSA) if your benefits plan offers it. What were your out-of-pocket health care expenses during the previous year? If you, your spouse, and your child spent $1600 the last year on co-pays and medicines, have $75 deducted from each check and placed in the HSA. Not only do you save a few bucks on taxes, but you also have money to spend on out-of-pocket medical costs. If you don't spend it, you can keep the money in the account and spend it on future medical costs. I can't tell you how many times my HSA saved me when I had a sudden medical expense. For someone making $65,000 per year, a 3% HSA deduction will put an estimated $75 in your HSA and will only reduce your take-home pay by around $60.

Enrolling in an HSA-eligible high deductible plan without contributing to the HSA is a significant mistake. Maximize contributions up to the IRS annual limit to benefit from triple tax advantages. Also, don’t forget about transferring funds between HSAs when changing employers. Review investment options within the plan for continued growth once a sufficient balance is accrued. Don't overlook beneficiary designation; designate HSA beneficiaries so that your love ones don’t go through complicated probate processes in the event of your passing. Lastly, remember that HSA usage isn’t limited to medical, dental, and vision expenses. They can also be utilized for COBRA and Medicare premiums, offering significant financial support in the future.

Look at your health care expenses from the prior year and evaluate if you were enrolled in a health savings account. You’ll see the impact and potential savings if it fits your needs. An HSA can offer triple tax savings however, it’s not a fit for everyone.

Do whatever you can to take full advantage of your HSA. It’s just like employer matching your 401k contributions. It’s essentially free money when you max out your contributions to max out your employers match. Evaluate your budget and do everything you can to get the maximum benefit of your HSA and the triple tax savings it provides.

In today's economy, employees try to maximize what they bring home in pay. However, with medical costs, money is going to be spent at some point in time. Depositing funds in your HSA before taxes allows you to contribute more because of the tax savings. This money adds up quickly, and it's your money forever. Your HSA can follow you even after you leave the employer and even into retirement. Families can deposit up to $7,100 per year - you should contribute as much as you can afford. After a layoff, I needed surgery to reattach my retina. I used my HSA funds to pay for that surgery. It was a great feeling to know I had those funds!

Thank of your HSA dollars the same way you would view your retirement savings. You want it to be diversified and grow at a healthy rate. Future healthcare expenses can really take a bite out of your future retirement savings, and an HSA is a great way to lessen that impact.

Your Health Savings Account (HSA) is an asset. I would consider an HSA to be a part of retirement planning. Therefore, check with the provider of your HSA and see how you can invest your funds.

One common mistake to avoid when saving for future medical costs is not using HSA funds wisely. While it may be tempting to treat an HSA like a regular savings account, its true power lies in covering qualified medical expenses tax-free. Misusing these funds for non-medical expenses incurs penalties and reduces the long-term financial benefits. To maximize savings, people should prioritize using HSA funds for eligible healthcare costs and keep records for potential reimbursement, allowing the HSA to grow tax-free over time. This approach ensures the full potential of the HSA is leveraged, safeguarding both health and financial future.

When evaluating and enrolling in an HSA, take the time to fully educate yourself on how it works, and what expenses are eligible. This way you’re going in with eyes wide open and you’ll be able to fully take it advantage of this great opportunity to save money.

Be a conscious consumer: - review your insurer’s member website to look up cost information on specific procedures. Costs for the same procedure vary widely so it pays to understand fees before you incur them. - Talk to your doctor about using an alternative provider if you find a better value somewhere else than the referred provider

Healthcare expenses are one of the top causes of bankruptcy. Yet when we’re young and healthy, we would never think this. Your healthcare benefits are a crucial part of your compensation and employers pay a lot for this coverage. Often employers can’t pay 100% percent of these costs and have to pass a portion of it on to employees. Regardless of what your employer does, you need to fully educate yourself on this valuable benefit, and take full advantage of it. You can’t get the full value from this benefit unless you understand the coverage it gives you & use it accordingly.

Not everyone can contribute the maximum and in these circumstances, it is always best to consider their families circumstances for the year. For example, if there are children in the family involved in sports, plan for potential scrapes that can potentially take you to the ER. Or a scheduled procedure - add up those costs and contribute that amount towards the HSA.

Always have the websites of your benefit providers (along with the logins and passwords) handy. This includes health, life, vision, dental, Health Savings Accounts, Flexible Spending Accounts and retirement funds. I would recommend taking the time each month to login to the portals for those accounts and reviewing balances and rates. This will educate you and keep you on track for a healthier financial plan. This little tip will also keep the information fresh in your memory for those times that you need the information the most. When you or a family member is sick - it can be difficult to gather the information, you need.

Educate yourself, and utilize an expert to help you understand this valuable benefit. By doing this, you’ll improve your overall financial health as well as supporting your wellness, your family’s wellbeing. Don’t wait until you need it. By then it’s too late to get the full benefit.