S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
HERE’S ANOTHER TAX-ADVANTAGED WAY TO SAVE FOR RETIREMENT. Many people are looking for ways to save more for retirement. An option that is often overlooked is the health savings account, or HSA. While some eligible people are using these accounts for short-term savings, most are not taking advantage of the potential long-term benefits, according to Bank of America’s 2023 Workplace Benefits Report.
Anyone who is enrolled in a qualifying high-deductible health plan (HDHP) can contribute to an HSA. It’s an attractive option because these accounts offer a triple tax advantage.
1. Contributions are made with after-tax dollars.
2. Any investment earnings grow tax deferred.
3. Withdrawals taken for qualified medical expenses are tax-free.
This year, individuals can contribute up to $4,150 to an HSA, while families can contribute up to $8,300. Depending on the HSA, it may be possible to invest any money that is not used for current medical expenses.
For instance, imagine a 35-year-old saves about $2,000 in an HSA each year until retirement at age 65. They withdrew $500 a year to pay for healthcare, and invest the rest, earning 7 percent a year, on average. At retirement, the individual would have more than $150,000 in the account.
Best of all, after age 65, the money in an HSA can be withdrawn without penalty for any purpose at all. The caveat is that taxes may be owed on distributions taken for purposes unrelated to healthcare. In addition, the savings could be used to reimburse some Medicare premiums, as well as healthcare costs that are not covered by Medicare.
If you would like to learn more about HSAs, please get in touch.
Weekly Focus – Think About It
"Remember that sometimes not getting what you want is a wonderful stroke of luck."
—Tenzin Gyatso, Dalai Lama
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