Bean Counters and Savings Plan Knowerabouters

[BarryBobPosthole]

Stumbled across some information about Health Savings Plans and wanted to get some opinions. The IRS made some rule changes over the past several years that may make this a pretty good option for folks like me who want to retire before 65 when the great titty in the sky kicks in (Medicare). If I understand these accounts right, you can carry over what you don't use now year to year, like an IRA, and that you can deduct what you put into them (max $6600 for me and wife per year) from your income tax, and when you take money out of them for qualified expenses, like insurance premiums for example, it is tax free as well. So if I am reading this right, I can pay all of my insurance premiums tax free with it and also get the benefit of a tax break by deducting 100% of the expense from my taxes now. Am I reading this right? Another question I have is can I direct the investments in a HSA the same way I can an IRA?

This almost looks too good to be true. I THINK I could save enough between now and retirement to pay all of my medical premiums and out of pocket deductibles for three years (62-65) with tax free money which would be huge, at least 25-28% cheaper.

What's the friggin catch? And no, my company doesn't offer this. I'd have to go get one from some company on my own.

BKB

[Chicken Dinner]

I honestly haven't followed the details if these things very closely as it hasn't impasses me yet on a personal or professional level. From what I have been hearing us that may change pretty quickly for a lot if Americans with what would be considered "good", but not all that overly generous, employer provided health plans. As the price of health plans continues to outstrip inflation, fairly standard plans will start meeting the definition of Cadillac plans and the 40% excise tax on the employer excise tax will kick in. The most common outcome is that employer's set up HSA's, stick some cash in them and let their employees go figure it out.