The Tax Advantage Every 20-Something Needs to Know About
3 min read •
30 sec brief
20 somethings (aka Millennials) have a unique opportunity when it comes to healthcare. HDHP + HSA = more savings.
Cheaper often means sacrificing options and value. This was the standard for health insurance. This has changed. Let us show you how younger employees can use healthcare to their advantage to save on their premiums and open a tax-free health saving account.
20 somethings (aka Millennials) have a unique opportunity when it comes to healthcare. Statistically speaking they have lower health costs, giving them more options when it comes to health insurance selection.
Drop what you are doing and follow this 2-step process to achieve both health and tax savings.
Step 1: Choose the Lower Premium Healthcare Option
Health insurance is a never-ending battle of cost vs. benefits. If you are young and healthy, you are likely overpaying for health insurance by selecting plans with benefits you will never use for all of those ‘just in case’ scenarios. You still need a health insurance plan that can offer you value. What is the right mix?
Consider the ultimate value plan, the high deductible health plan (HDHP). HDHPs aren’t new to the market, but they are an easy way to reduce your monthly premiums and still get the coverage you need. This reduces your cost but ensures you are covered for all of the ‘just in case’ scenarios.
Step 2: Add an HSA and Save Tax-Free
Ok, at this point you know how to lower your health insurance costs. But how does that enable you to find a hidden tax advantage?
What you might not know is that by selecting an HDHP, you can open an HSA. HSAs, which are basically 401k(s) for healthcare, allow you to save, invest, and spend (as long as used for health expenses) 100% tax-free money. There is nothing else like it on the market.
What does this mean?
- You get to keep more our money, 100% TAX-FREE
- You pay for health expenses tax-free (if you use your HSA funds)
- You get a bonus retirement account
You have your entire life ahead of you. This is an easy way to get ahead. Use an HDHP to save money on your monthly premiums. Use an HSA to save and invest tax-free funds for your health savings.
You save more. You get more. You win. Healthcare might just be made for you!
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.
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