Agricultural Economics Department
Date of this Version
4-14-2021
Abstract
Many individuals are aware of IRAs, 401(k) plans, 403(b) plans, and others when starting to build their retirement portfolio. These plans all have their benefits and drawbacks that need to be accounted for. What surprises many is there is another tool that you may be qualified for and are underutilizing. A Health Savings Accounts commonly referred to as an HSA, has some interesting possibilities that could be useful. An HSA is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualifying medical expenses. While you cannot generally use this money saved to pay for health insurance premiums you can use it to pay for deductibles, copayments, coinsurance, and some other types of expenses. While many individuals say they are healthy, my comment is generally there will be a time down the road when they are not. Most farmers will need hearing aids due to years of working around loud machinery, glasses are required as our eyesight worsens, and additional care is required the older we get. This HSA can be a great tool to ensure your other retirement funds can be used for living and fun leisure activities.
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