Tuesday, November 30, 2004
Forbes recommends HSAs in 2005 Investment Guide
[Carrie Coolidge, "Saving for Your Health," The 2005 Investment Guide, Forbes, 13 December 2004.]
The new Forbes Investment Guide is out, and the authors recommend HSAs from both a health insurance and savings perspective. Included in this piece is a chart of providers and interest rates:
For the right customer an HSA can save thousands of dollars a year. "HSAs change the mentality of consumers," says Jeffrey E. Daniher, a fee-only financial adviser in Cincinnati. "They will start shopping around for the best price and not have unnecessary procedures done." Adds Helen L. Modly, a fee-only planner in Middleburg, Va.: "Suddenly generic drugs won't look so bad to many of us."
Unlike a flexible spending account, an HSA is an account you don't have to tap into. In fact, smart, prosperous customers won't even make withdrawals to pay their doctor bills. They will pay those bills out of pocket, allowing their HSAs to compound tax-free as de facto IRAs. If the money is ultimately used decades later to pay postretirement medical bills, so much the better: The account is better than an IRA because the funds are untaxed.
[Carrie Coolidge, "Saving for Your Health," The 2005 Investment Guide, Forbes, 13 December 2004.]
The new Forbes Investment Guide is out, and the authors recommend HSAs from both a health insurance and savings perspective. Included in this piece is a chart of providers and interest rates:
For the right customer an HSA can save thousands of dollars a year. "HSAs change the mentality of consumers," says Jeffrey E. Daniher, a fee-only financial adviser in Cincinnati. "They will start shopping around for the best price and not have unnecessary procedures done." Adds Helen L. Modly, a fee-only planner in Middleburg, Va.: "Suddenly generic drugs won't look so bad to many of us."
Unlike a flexible spending account, an HSA is an account you don't have to tap into. In fact, smart, prosperous customers won't even make withdrawals to pay their doctor bills. They will pay those bills out of pocket, allowing their HSAs to compound tax-free as de facto IRAs. If the money is ultimately used decades later to pay postretirement medical bills, so much the better: The account is better than an IRA because the funds are untaxed.
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