Learn From The Tale Of Two Employees
As a benefits administrator, we’ve heard a lot of reasons as to why someone wouldn’t use their health savings account (HSA) for long-term savings. And we get it: in some cases, using an HSA for medical costs becomes a necessity. But often times, people think they have to be a super saver or have lots of disposable income to really capitalize on their HSA for retirement savings. Not true!
Don’t believe us? We’ll introduce you to Joe and Jill—a tale of two employees who both reaped big benefits from their HSA.
At 25 years old and just 3 years out of college, Joe’s what you might consider a typical millennial. His top priority is tackling his significant student loan debt. Because of this debt, he’s put buying a house on hold, and prefers to feel more financially stable before starting a family. Joe needs affordable health care today, and intends to use some of his HSA for medical costs that arise.
Jill kicks off her HSA at age 25 by contributing the max amount each year. Along the way, Jill gets married and has children, boosting her HSA contributions up to the family limits. That means the HSA can be used to cover medical costs for both her spouse and her children, if she chooses to use it as such. Instead of using her HSA for medical costs, Jill decides to use out-of-pocket funds and hold on to receipts for any future HSA reimbursements.
Everyone Can Benefit
It’s easy to see how employees with different saving goals can benefit from an HSA, especially in the long run. Employers also shouldn’t overlook the tax benefits available to their organization for offering an HSA to their employees.
Employers, check out our “Tale of Two Employees” health savings account infographic to help communicate to your participants the broader financial benefits of an HSA.