Helping employees stay healthy and prepare for retirement is at the core of most benefits offerings. Healthcare insurance is for today and retirement savings is for tomorrow. These two benefits serve as the stable of any well-rounded benefits plan.
The 401(k) is the gold standard of retirement savings with dedicated funds to save tax-free money. Tax-free growth only sweetens the deal. Likely why 32% of all Americans have a 401(k). What if there was another tax-saving vehicle that could be used just like a 401(k), but had an extra tax advantage and was for health cost as well? The HSA might be the only 2 for 1 deal offered for healthcare and retirement savings.
A recent study by Alight Solutions has laid out the connections between healthcare, 401ks, and the HSA. We broke out these relationships even further to outline the savings impact on age, gender, income and healthcare dependents.
“Want to Save More? 401(k)s and HSAs are a Perfect Match”
Saving for retirement is hard enough. Having those hard-earned funds taxed in retirement can feel emotionally frustrating and financially exhausting. No matter how much money you have saved for retirement, the further that money can go, the better. Here is how to use two retirement tax vehicles to save the most money today, and have 100% tax-free retirement income.
One of the mainstays of employer benefits packages, the 401(k) and its cousin, the 403(b), are this generation of employees’ retirement workhorses. Updated by Congress under the Pension Protection Act of 2006 (“PPA”), employers can opt you into the plan, initiate automatic deposits from your payroll and even increase the percentage over time, all in your best interest.
Strategizing and selecting the benefits options for employees before open enrollment is a daunting process. Open enrollment strategy requires time, effort and more options every year. By default, this makes 2018 the most complex open enrollment period yet. There are layers of complexity, hype, providers and systems integrations to think about.