The theme this week on the Retirement Quick Tips Podcast is: How To Max Out Your Retirement Savings in 2022

Today, I’m talking about why you should fund a HSA first before your 401k and before even a Roth IRA for retirement, especially if you already have money saved in these other accounts for retirement but nothing in a HSA. 

• I believe that a Health Savings Account, or an HSA, is the best retirement plan you can utilize in saving for retirement. So few people use it for its intended purpose though - to plan and save for healthcare costs in retirement…which is perplexing because the HSA allows you to save for healthcare costs today and get a massive tax break for it! 
• You’ll be able to sock away up to $8,300 in your HSA account in 2022 if you’re over 55. If you’re younger than 55, the limit is $7,300. 
• With an HSA, you get the holy grail of tax benefits, something that no other retirement savings account can match - not your 401k, not even a Roth…Money going into an HSA is tax deductible. Then, once it’s inside the account, those HSA contributions grow tax-free...and as long as the money on the way out is used for qualified medical expenses, it’s not taxed on the way out! 
• Because of these massive tax benefits - tax deductible contributions, and no taxes on growth or withdrawals - many financial gurus argue that you should max out your HSA before you save in your 401k, because the tax benefits are so phenomenal. I agree! 
• Where many people miss the benefits of the HSA is in how the account is invested. They fund it and use it to pay for medical expenses now. But that misses out on the massive future opportunity that comes from tax-free growth. So if you’re going to fund a HSA, you should be setting aside a significant portion of the account to be invested in a diversified portfolio - not just sitting in cash, earning $3 of interest per year! 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance