Three tax savings strategies for a secure
retirement to try right now
BPT
I
ndividuals who rushed to prepay property taxes after
the passage of the Tax Cuts and Jobs Act may have saved
some money in 2018 - but that’s pennies compared to the
long-term tax savings taxpayers should take advantage
of before the TCJA’s individual tax provisions are expected
to expire in 2026, according to Robert Fishbein, vice
president and corporate counsel at Prudential Financial.
costs. A Health Savings Account, or HSA, provides a
way to save that money without paying a dime in taxes.
An HSA account is available to individuals enrolled in
a high deductible health insurance plan.
First, these individuals can fund their HSA through a
tax-deductible contribution or pre-tax payroll deduction.
Second, any interest and investment gains are tax-free.
Also expected to expire in 2026? According to trustees for Finally, the funds can be withdrawn tax-free to pay for
Social Security, that’s when Medicare’s main trust fund qualified medical expenses- a triple tax advantage over
will run out of money. With the increasing likelihood that a traditional savings account.
Social Security and Medicare benefits may be reduced
in the future, it’s more important than ever to use every The best part? There is no requirement to use HSA funds
technique available to maximize your retirement savings. in the year of contribution, which means funds can grow
on a tax-favored basis for future health care expense
Three outside-the-box strategies could make an enormous needs.
difference in your retirement readiness. The sooner you
start, the more you may save.
For 2018, family contribution limits are $6,900, or $7,900
if you are 55 or older, and those amounts are indexed
Fund an HSA for retirement health care
for inflation in future years. If you start contributing the
Estimates suggest even a healthy 65-year-old couple will maximum even as late as age 55, and earn 3 percent per
need at least $275,000 to cover retirement health care year, you could have more than $90,000 to pay for your
24
|
WINTER GARDEN MAGAZINE
|
OCTOBER 2018