So it’s the start of the year and you’re looking into the future … this year and for retirement.

A Different kind of health plan: HSA

First let’s talk about an HSA or Health Savings Account. In my world of real estate, most of us are independent contractors who pay for our own health insurance and pay for everything out of pocket. We often don’t think about Health Savings Accounts where we can deduct a little bit from our checks each month to go into this account so it can be used anytime during the year for qualified medical expenses like over the counter medicines, doctor co-pays, prescriptions, medical supplies and more. This type of plan is really useful so you can always have an account with some money in it to pay for health related costs and ‘feel’ like it’s not coming out of your pocket and you know you’ve saved it for those specific purposes. Some banks have these types of accounts and if any of your clients offer this to their employees, you can ask who they use to find out if you can set up an individual plan.“Piggy Bank And Stethoscope” by cooldesign

If you are an employee, your employer may offer this already. If so, it’s easy to get a few dollars of your choosing deducting from each pay check to go into this plan that can be used for you and your family.

If your employer doesn’t offer it, you can either look at setting up your own account as mentioned above (I know Wells Fargo has this account and other big as well as small banks may offer it too). If you don’t want to set up your own account just yet, you could ask your employer to set one up for the company. To do this an employer will usually get set up with an intermediary who will have a monthly management fee from $25 – $100 per month depending on the size of the employer’s company.

A Retirement Plan

Do you want to have a plan for income after you decide to stop working? You might have some passive income streams in real estate and other businesses, and if so, AWESOME!! A safe plan I’ve witnessed many individuals, wealthy and not, use is 401K programs. Your employer may offer this and may even offer a matching program – you’re crazy not to take advantage of this if you can do it!! Your contribution, a percentage of your pay, can be deducted from each paycheck then deposited to an account that’s yours. Get details from your employer on how their program works and what happens if you leave the company. If you want to fund one yourself, you can go to your own financial advisor or your bank. Often your bank will have a financial advisor whose job is to help guide you through this process. You can still have payments deducted from your check and directly deposited to your own account.

Depending on the type of account, you may be able to contribute dollars pre-tax or post-tax. For pre-tax contributions, you will then be taxed when you withdraw the money at retirement. For post-tax dollars, it is withdrawn at retirement without additional taxes. Talk with a professional on the pros and cons of these based on your individual situation.

Plans specifically for retirement programs will have a maximum per year you can contribute. If you can max it out each year, it’s a good thing.

*NOTE: We are not financial advisors. This post if for general informational purposes only. To understand the details of how any program works, we encourage you to seek out a professional who specializes in the space you want more information in.

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