HSA Headlines - 5/25/18 - Single-parent planning with an HSA
If you're a single parent, making a budget that can cover the costs of raising children is a good plan for their long-term well-being. But -- as hard as it may seem -- kids shouldn't be your only focus. They may be the center of your universe, but any health savings budget you make needs to factor in your own health expenses, both now and as you work towards retirement.
Think about it -- your kids might end up looking after you when you retire, and you don't want to straddle them with the cost of your care because you didn't plan ahead. (Maybe it IS all about your kids!)
In this week's HSA Headlines, we're looking at a pair of articles that show how single parents all over the U.S. are discovering the power of health savings accounts (HSAs). Not just as a way to cover immediate health expenses for their families, but also for building a tax-free resource for medical expenses that might come during retirement years.
This has been a common thread among personal finance writers in the news lately, so we're going to cover a few of their best tips in this week's edition of HSA Headlines!
6 Financial Musts for Single Parents - Leslie Tayne, MarketWatch
First and foremost, whether or not you're a single parent, you should develop a budget to track every expenditure. But author Leslie Tayne suggests going a step further and developing a system on top of your regular budget.
One takeaway we liked was to schedule a "self-audit" on a regular basis. There are many budgeting apps you can use that are compatible with smartphones and tablets that can give you a leg up, and this can provide you a view into where and when you should make adjustments to your spending. This can be particularly handy when monitoring your HSA use and savings.
5 ways to build retirement stability in your 50s - Alicia Rose Hudnett, Wise Bread
If you're a single parent nearing middle age, there are extra considerations to keep in mind if you are opening an HSA, namely "catch-up contributions." HSAs have a built-in provision that allows account holders 55 and older to contribute an additional $1,000 over the plan year contribution limit.
So, if you're opening an HSA in the coming year (HSA contribution limits have risen for 2019), the contribution limit is $3,500 if participating in the health plan as an individual, but you can set aside an additional $1,000 per year if you are 55 or older.
This could provide a major windfall for your retirement savings and allow you to set aside tax-free money for healthcare expenses that might pop up as you approach (and embrace) middle age.
No matter your age, if your family has regular healthcare expenses, funding an HSA may be the best option for your financial wellness. This will let you cover thousands of eligible medical products and services (like those on our Eligibility List) and supplement your retirement savings down the line.
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.