Three Things
Published On: November 23, 2022
Written by: Ben Atwater and Matt Malick
First, we wish you a very Happy Thanksgiving! We are extremely grateful to work with you.
Second, in observance of the Thanksgiving holiday and to give our team a much deserved break, we will be closed on Thursday and Friday of this week.
And third, we want to offer you a holiday savings “hack.” A hack being a shortcut to a result, in this case, a well-funded retirement.
As you know, markets are completely out of anyone’s control. How much we save, however, is somewhat under our control. However, the cruel irony of saving is that it is often easier to save when markets are rising and the economy is strong, than it is when markets are falling and the economy is weakening.
Of course, 2022 is a case of the latter. History tells us though that it is crucial to “pay yourself first” when markets are down because we are “buying low.”
For many mass-affluent savers, the easiest way to save is in workplace retirement plans because of their automatic nature. People often do not really notice the money that goes directly into savings without passing through their checking accounts, hence the phrase “paying yourself first.”
Those who have qualified high deductible health plans (QHDP) and are therefore eligible for health savings accounts (HSAs) can use these HSAs as a “second 401(k).” This is particularly true for higher earners and careful spenders who can pay their medical expenses from their general funds and not from their HSAs.
If you can pay your health care expenses out of pocket and your HSA has long-term investment options (like mutual funds), hack your retirement by maximizing contributions, not spending the funds and thereby turning your HSA into another meaningful retirement asset.
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