FOMO, the fear of missing out. We all have it from time to time, right? We open the magazine in the grocery store aisle to see the juicy celebrity gossip, or we wait in obnoxiously long lines around the holidays to get that new electronic or toy that everyone is after. But what about having FOMO for your health savings?  
Did you know that the average 65-year-old couple retiring in 2019 can expect to spend roughly $285,000 in health care and other medical expenses through their retirement? However, The Center for Retirement Research at Boston College estimated that in 2016, the median household approaching retirement with a 401(k) or IRA had roughly $135,000 saved. As you can see, there is a deficit between what we are saving versus what we are spending in just health care alone. Are you feeling a little bit of FOMO yet?

The HSA, or Health Savings Account, has been around for a while, but this benefit has been consistently under-appreciated. This is mainly due to the fact that to utilize an HSA, you must be enrolled into a high-deductible health plan (HDHP), in which (like the name of it indicates) you do have a large deductible to pay. An advantage of an HSA plan is that once you hit a certain threshold (typically $2,000) in your HSA account, you can start investing your money into funds that will help it grow. The hurdle with this is that it can take a good three years to grow the funds to a level where you can start investing, as you will likely have medical expenses along the way that will need to be paid for first.

Picking up that HSA that your employer is offering can do quite a few things for you. For one, it can drop your monthly premium significantly. Secondly, it will roll over from year to year (it is YOUR money!) Third, and most importantly, you take it with you no matter where you go! Leaving the company? That’s okay, your HSA moves with you. Next employer doesn’t offer a HDHP? That’s okay, the money you have in your HSA doesn’t go anywhere!  Without having a high-deductible health plan, you would not be able to add to the funds, but you could use them or, even better, save them.

There are some tricks that can help you grow the HSA funds faster. And when we look at this as an investment opportunity, the growing pains don’t seem so bad. Just keep thinking about the $285,000 you may have to pay in medical bills after you retire if you need some coaxing!
  • Utilize a Limited Purpose FSA. You are not allowed to have a medical FSA and an HSA at the same time. However, you can have a Limited Purpose FSA (LPFSA) and an HSA together. The limited FSA can be used for dental and vision approved expenses. So, if you are in the midst of orthodontia payments or wear glasses or contacts for example, you can use the LPFSA to pay for those. Because these will more than likely be charges you are aware of, you should be able to budget and only put the amount you will be using into the LPFSA. Like any type of FSA, it is only good for the year and if you don’t use the funds, you lose them. However, you have been paying for contacts and eye exams periodically, look at your history and plan your savings accordingly.
  • High Deductible Health Plans have lower monthly premiums. This is an advantage if you are switching from a higher premium plan such as a PPO. You have been living without that money in your paycheck each month, continue to live without it and put that amount in your HSA. It's a great way to save extra without feeling the financial bite.
  • Pay for small expenses out of pocket. I am talking about the $10 maintenance medications or the Band-Aids and sunscreen that we can use our pre-tax dollars for. Imagine how much of that we could save to invest if we just skipped the Starbucks instead used that $10 on a small medical bill. Always remember, the decisions that you make today can and will affect the life you lead down the road.
So if you suffer from FOMO, be sure to fear missing out on the right things! Skip the magazine in the grocery aisle and pick up that Open Enrollment packet that you just received from your employer, or research some articles about how to utilize the benefits that you are offered. Make sure that you are taking full advantage of what is out there!   

If you have questions or are interested in learning more, reach out to us! 
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