There are 2 best retirement accounts HSA - Health Saving account as this give you benefit on zero income taxes , employer matches and the INTEREST is not taxaBLE.
The other is ROTH IRA , the amount is noty taxable on withdrawal.
The answer, as usual, depends. Sure, the HSA is tax deductible, grows tax-free, and offers tax-free qualified withdrawals. And some people get an insurance premium pass through. But it also requires you to be enrolled in a high-deductible health plan, which isn't necessarily a good option for everyone. The Roth IRA is another good option for tax-free qualified withdrawals, but people shouldn't necessarily ignore the traditional IRA, 401k/403b, or Roth 401k/403b. I'd suggest looking at the tax benefits for each of these, but that's only part of the equation. People also need to consider that management fees for the account options and the available investments in each option. All too often, people view personal finance as a one-size-fits-all topic, when really, there are many aspects that should be taken into consideration in making decisions that work for you.
i never heard of "hsa", but will checking that out. thanks
I am an intelligent woman…for most things. But, when people start talking about all of these different accounts, investments, etc, my eyes glaze over and I become completely overwhelmed.
Couldn't agree more with @Aaron G.
Have nothing to add without knowing specific situations.
As for @Kristina C.: I believe a sign of intelligence is also knowing your limitations. Might I suggest you have a friend who is well versed in such matters to help, or to run it by a certified financial planner. Although you may be overwhelmed, these accounts are very important to your future and should not be neglected.
I am an intelligent woman…for most things. But, when people start talking about all of these different accounts, investments, etc, my eyes glaze over and I become completely overwhelmed.
I agree with @Micky H. that part of being intelligent is knowing and understanding your limitations and taking the necessary steps to address those areas. At a basic level, when we refer to these specific retirement accounts, we're talking about accounts that are intended to be used to save for retirement. As such, these accounts offer some form of tax benefit, but in exchange, there are restrictions on how the funds can be withdrawn without penalty. The concept is essentially that the tax benefits can allow more money to be placed in the account and that the money can grow faster without the same tax burden that taxable accounts have.
Thank you! These explanations are very helpful!
401K, HSA, and IRA are three very good tax advantage accounts.
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My employer offers a FSA and not an HSA. Are they similar and is it worth contributing to?
My employer offers a FSA and not an HSA. Are they similar and is it worth contributing to?
These are similar in that they deal with healthcare expenses, but they're very different in execution. An FSA is a Flexible Spending Account while an HSA is a Health Savings Account (note that one is essentially for spending and the other is for saving). An HSA requires you to first be enrolled in a high-deductible health insurance plan. If you meet the requirements, you can open an HSA for an individual or family (requirements differ). With an HSA, you get a triple tax benefit: you get a tax deduction for contributions, your assets grow tax free, and your qualified withdrawals are not taxed. You can invest HSA assets, you keep the assets, and they don't need to be spent at the end of the year. You should probably talk to HR to get more details.
My employer offers a FSA and not an HSA. Are they similar and is it worth contributing to?
Great answer from @Aaron G. just to bring the focus back on something he mentioned:
(note that one is essentially for spending and the other is for saving)
With that in mind, as you have an FSA the determining factor is if you can spend it. So from HR you would want to know how much you can put in and how much you can roll over to the next year. You may also want to look into what the FSA can pay for. Once you know all this you can calculate the amount you want to put in to the FSA.
To wrap up I think the FSA is a great tool as long as you spend it on things that you need by the end of year.
Thank you @Aaron G. and @Micky H.
@Adryan R., you may also want to explore HSA options outside of your employer. I have my employer-sponsored HSA with HSA Bank and another HSA with Fidelity. As you decide between an FSA, HSA, or both, be sure to consider how having one may affect the other. For example, having an HSA precludes me from having a Health Care FSA, but I can still enroll in a Limited Expense Health Care FSA or a Dependent Care FSA.
Anytime @Adryan R. As long as the tips help.
free
From your employer: 401K and HSA (if available)
On your own: Roth IRA
Very helpful thanks for the info.
You can increase your limitations by studying and reading to improve your knowledge
Great information.
I think that the 401k employer match and Roth IRA are the best.
I was wondering this too. Thanks for all the info
Interesting info
I’ve always heard ROTH is best
Most pension plans Invest in Roth IRAS.
