There are multiple ways that people can spend their money on. But what matters the most is that these individuals spend it on investments. For instance, it’s wise to save funds for possible scenarios in the future. People can get sick anytime. And having no enough funds to cover for these expenses is burdensome. That is why there are many plans and accounts that aid people in this aspect.
HSAs and the Future
Employees may be familiar with HSAs. These are accounts that employers and employees both agree to open for the sole purpose of backing up qualified medical expenses. It’s inevitable for people to get sick any time of the year. And there are even times that the plans and funds set aside for these instances can’t fully shoulder the expenses. This is why some employees opt to have an HSA during their employment.
These employees need to have an HDHP to be qualified to have an HSA. And for their account to be maintained, they must have a contribution per year. For the year 2018, each individual must contribute $3,450 per individual whereas the contribution per family is $6,900. Some changes are made with the HSA contribution limits 2019. In the upcoming year, each individual must contribute $3,500 whereas per family must have a contribution of $7,000. But the extra catch-up contribution for individuals aged 55 and above still remains at $1,000 per year.
Contributing to the Future
Many experts advise that individuals max out their contributions on these accounts. This is because, at the end of the year, they will have a lesser income tax to burden. HSA contributions are 100% tax-free. This only means that the more people contribute to their HSA, the more amounts will be removed from their taxable income, thus the lesser tax obligations.