HSA Headlines - 4/12/19 - The reality of rising health care and retirement costs

Long-term savings and retirement are topics that come up quite regularly in this column - with good reason. HSAs offer a tax-free method of covering qualified health expenses and can provide a welcome rainy day fund for medical and non-medical expenses once you reach Medicare eligibility at 65.

But what if that's not enough? This week's column will tackle the ever-growing estimate of what a couple nearing retirement will have to save just to cover health care expenses, along with new legislative approaches that could change how we look at retirement savings.

Health care costs for retirees climb to $285,000 - Sarah O'Brien, CNBC

We've been running this column for about a year, and when I started, the conventional wisdom was that $250,000-$275,000 was a safe figure to cover expected health care expenses in retirement for a couple, but we have blown far past that.

According to this year's analysis by Fidelity Investments, a male-female couple in good health retiring at age 65 in 2019 can expect to spend $285,000 on health care expenses in retirement.

This analysis, which includes factors such as premiums, copays, cost-sharing expenses, and prescription drug costs, is just what's covered by Medicare. Dental, basic vision, over-the-counter medicines, long-term care and other expenses will have to be factored into health care budgeting for retirement as well.

HSAs can help to cover everything we just mentioned, so this further highlights that a full-court press approach to retirement planning and saving is necessary in today's health care environment.

Senators propose requiring employers to contribute to workers savings' accounts - Lee Barney, PlanSponsor

Senator Amy Klobuchar (D-MN) and Chris Coons (D-DE) have introduced the Savings for the Future Act, a new approach to assisting workers in saving for retirement and building their savings.

The bill calls for employers to contribute 50 cents for every hour an employee works, which factors out to about $20 per week or $1,048 per year. The bill would affect companies with 10 or more employees to direct a contribution to a retirement account like a 401(k), with businesses of all sizes receiving tax credits for these contributions.

The fact is, 40% of American adults would have trouble covering a $400 emergency expense, so while this plan may seem a bit unorthodox on the surface, it could make a major difference in the lives of average Americans if it were to pass. This also seems like the perfect place for employer-sponsored HSA contributions to enter the conversation, so we'll keep a close eye on this bill's progress 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.

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