HSA Headlines 12/21/18 - HSA vs. IRA; working with advisers on investments
For personal finance news watchers like us at HSAstore.com, the end of the year is particularly interesting as journalists and experts analyze the trends from the past year and forecast their predictions for 2019.
While this certainly leads to a deluge of "End of Year Money Moves" articles, there are some very interesting takes out there that we want to bring to you to help you maximize the potential of your HSA. Let's take a look at this week's best HSA stories.
New in HSAs: AI Capabilities and an Adviser Program - Marlene Satter, ThinkAdvisor
As we've covered in this column in the past, consumer education is still an inherent problem surrounding HSA use, but HSA administrators appear to be pulling out all the stops to correct this issue in 2019. Over the past week, we've had our eyes on two new consumer education initiatives from Alegeus and HSA Bank that could pay dividends in 2019.
First up, Alegeus is tackling the other side of the equation to ensure that HSA programs are working for employers' bottom lines using "machine learning and artificial intelligence to deliver the industry's first truly 'smart HSA.'"
Utilizing an advanced employer portal, employers can now track a variety of metrics, including the capture of premium and tax savings from specific benefits plans, as well as benchmarking performance against peers with a consumer-directed health score. This allows employers to quantify the financial impact of a program, and make any changes as necessary to take advantage of further savings opportunities.
On the other side, HSA Bank is making a big commitment to upping its retirement savings game, but also helping employees cover the here and now. HSA Bank has created an adviser-driven HSA investment program that will allow investment advisers to give employees an open-ended HSA investment architecture.
Essentially, this will give new and existing HSA users a dedicated financial adviser to use his/her expertise to invest their HSA funds where they will grow the most. Employees will still be there every step of the way, but for those who prefer more of a hands-on approach with their money, this is certainly a very cool step forward for HSA users.
Why I'd rather save for retirement with an HSA than an IRA - Laura Adams, GO Banking Rates
We're all for "hot takes" in this column, and this one certainly caught our eye this week. IRAs are one of the most popular retirement plan options, but as the cost of healthcare increases every year, many financial experts are pushing HSAs as an alternative to funding an IRA.
In some ways, the accounts are very similar - contributions to a traditional IRA are tax-deductible, while contributions/earnings are taxed as income when withdrawn during retirement (this is the same for HSAs when using HSA funds for non-medical expenses). But Roth IRA contributions are taxed, but withdrawals/earnings are typically tax-free?
So what's the case for the HSA? As we've covered in this column before, where IRA/Roth IRAs have a double tax advantage, HSAs have a triple tax advantage. There is no tax on contributions, future earnings or withdrawals for qualified health expenses. Ultimately, retirement account choices come down to maximizing your earning potential in your working years, and there's no one-size-fits-all solution.
Start by talking to a financial adviser to get a better sense of your options and how you want your money to work for you in the future!
HSA Headlines is a weekly roundup of the latest, most relevant news and conversations about your health savings. It appears every Friday, exclusively on the HSA Learning Center. And for more about your physical and financial well-being, be sure to follow us on Facebook and Twitter.