Older workers have a plum opportunity to sock away even more cash to cover health care costs in retirement — provided they do it correctly.
In 2019, individuals with self-only coverage in a high-deductible health insurance plan will be able to save up to $3,500 in a health savings account. Those with family coverage can put away up to $7,000.
Health savings accounts allow users to save pre-tax or tax deductible dollars, have them accumulate interest on a tax-free basis and then withdraw the money free of taxes for qualified medical expenses.
The deal is even sweeter for older workers: Once you’re 55 and over, you can make a catch-up contribution of $1,000 to your HSA.
That’s where things can become complicated — especially for savers who are married and those who are approaching Medicare eligibility at 65.
Here’s where you’re likely to hit complications when you’re funding an HSA and how to overcome them.