How to save for the unexpected
Is there a way to prepare for the unexpected?
The best way to save is to make a plan and set up a savings account as an emergency fund for when unexpected expenses arise. When learning about your savings account options, know that there are different types of savings accounts to fit your specific needs.
Unexpected medical bills are one of the more common ways people can experience debt. Fortunately, there is a customized savings account that allows you to prepare for those situations. This type of savings account is called a health savings account (HSA).
What is a health savings account?
A health savings account is exactly what it sounds like; it’s a savings account for those planned and unplanned medical expenses that pop up in life. This is a tax-advantaged savings account used to pay, or reimburse, for qualified medical expenses.
Are there benefits to an HSA?
In simple terms, there are several benefits to an HSA. Let’s talk about it:
- Health savings accounts are funded with pre-tax contributions and, when used for qualified medical expenses, withdrawals are tax free.
- These accounts are not subject to the “use-it-or-lose-it” rule which means funds properly contributed but not spent are not lost at year end.
- You also get to keep the account and the unspent funds you have contributed if you change jobs or retire!
- These types of accounts do require a high deductible health plan though and, as always, you should consult your tax advisor for tax related advice and opinions.
Don’t wait to save. Prepare your savings before an unexpected medical expense pops up in your life by opening a health savings account. Contact us with any questions you have about opening an account!