Save for Your Health (You'll need it!)

[54anickel]

Looks like you're on your own - rather than tackle the issues of rising health care, insurance and related costs, they just want you to save more for it. :eyes:

http://www.time.com/time/magazine/article/0,9171,1101040405-605495,00.html

In their report released last week, trustees of the Social Security funds revealed that unless changes are made, the Medicare Trust Fund will no longer be able to pay all its benefits by 2019. The prognosis? If you're under 50 today, plan to pay for more of your medical care in retirement. The treatment? You may be able to boost your retirement health savings with a new prescription: health savings accounts (HSAs).

HSAs, authorized by last year's Medicare law, offer a tax-free way to save for current and future health-care needs. Unlike medical savings accounts (MSAs), which were limited to small-business owners and the self-employed, an HSA is open to anyone under 65 covered by a health-insurance policy with an annual deductible of at least $1,000 for singles ($2,000 for families). A family can save up to $5,150 a year, individuals $2,600. Those 55 or older can contribute an extra $500.

As with a traditional individual retirement account, contributions are tax free and grow tax free. HSA withdrawals are also tax free, and there are no income limitations. The tax savings are enticing, but don't forget practical, everyday money needs, says Donald Overbey, a certified financial planner with American Express Financial Advisors in Northbrook, Ill. "See how it fits your cash flow, your cash-reserve position, and then check the tax benefits," he says. Unlike flexible-spending accounts (FSAS) offered by many companies, an HSA lets you keep any unused money, accumulating more tax-free savings. It's unclear, however, whether you can hold both an HSA and an FSA. The Treasury Department is sorting that out.

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