HSA contributions are made with pre-tax dollars, so there’s immediate savings to enjoy by funding one of these accounts. Also, any money you’re not spending from your HSA can be invested while it’s in your account, which means you can really grow your balance into a sizable sum. And any gains in your account, as well as withdrawals, will be yours to enjoy tax-free as well provided you spend that money on qualified medical expenses.
The only catch with HSAs is that to qualify, you must be enrolled in a high-deductible health insurance plan. In 2021, that means having an individual deductible of at least $1,400 or a family level deductible of at least $2,800. The rules for HSA eligibility change from year to year, as do the annual contribution limits, so it’s important to keep tabs on them as you go. But if you’re looking for a way to enjoy a world of tax savings, all the while setting funds aside for one of your largest senior expenses, then an HSA may the way to go.
Bank your raises
Christy Bieber: For many people, it’s difficult to save enough for retirement because there are so many pressing financial needs to fulfill in the moment.
But there’s a simple trick you can do in order to invest more effortlessly. You can commit to diverting future income increases to your retirement savings. So, if you were saving 10% of income now and got a 2% raise, you’d immediately start saving 12% of your income once the increase goes through.