HSA plans offer triple tax-free benefits: money is deposited on a pre-tax basis, grows tax-free and can be withdrawn without paying taxes as long as the money is spent on health and medical expenses. In addition, an HSA does not require future Required Minimum Distributions (RMDs) at age 73 like IRAs and 401(k)s.
Among many SECURE Act provisions, the law allows savers to delay required distributions, make penalty-free withdrawals for certain expenses, and offers new tax incentives for small-business retirement plans.
As 2019 draws to a close, it is time to consider year-end financial planning strategies and begin considering what approach to take for 2020.
There are several considerations to make regarding your retirement plan required minimum distributions, and the changing laws and numerous exceptions do not make the decision any easier.
Contributing to and investing in an HSA provides an efficient way to save for estimated retirement healthcare expenses while also minimizing the impact on other retirement savings, so those funds can be used for things you’d rather spend money on.