Are Health Savings Accounts the Next Retirement Plan?

retirement (Photo credit: 401(K) 2013)

It is no secret that end of life care consumes the majority of health care dollars. In fact, about 80% of all money spent on health care is spent during the last two years of a person's life. The problem with this is that many people have exhausted savings and sold off assets by that point to afford care. Health savings accounts (HSAs) may provide a solution to the problems of health care expenditures in old age. In some ways, they are like a retirement plan for your health needs. 

Qualified Expenses

HSAs, such as those offered by HSAforAmerica.com, are health care plans that provide tax benefits. In essence, as long as the money that is put into an HSA is spent on health care, it is tax free. This feature of HSAs has led many to compare them to individual retirement accounts (IRAs) and other tax-advantaged retirement plans. In truth, HSAs are even better than most IRAs because while HSA monies are guaranteed never to be taxed if spent on health care needs.

Qualified expenses can include a number of things that might traditionally be thought of as lodging. For instance, nursing home and retirement community expenses are completely covered so long as the individual lives in the facility due to medical necessity. Even hotel stays, home improvements, care equipment, alternative medicine, certain types of furniture, and more are covered if necessary for medical care. That means that room, board, transportation, and meals can be paid for, tax free, from HSA savings.

Essentially, the HSA offers a true tax free way to save for retirement. Though it may seem like a gimmick, the truth is that it is cheaper to pay for end of life care through an HSA than through Medicare or traditional insurance. HSA money is simply earnings that have been set aside over time. The best way to look at an HSA as encouragement to save for retirement, something everyone ought to be doing anyway.

As a final note, at age 65, HSA money can be withdrawn for non-medical purposes without penalty. Though you will pay tax on the money, it works just like an IRA, so the tax rate is lower than for other types of income. That means that an HSA is probably a better safety net for most people than an IRA due the flexibility that an HSA offers.

How to Treat an HSA Like a Retirement Account

Start Early

The key to a successful HSA that will see an individual through retirement is to start early. An account that is allowed to grow relatively untouched, for an average of 20 years, will be worth a substantial amount of money after compound interest is considered. If you can find a job with an employer who contributes, especially early in your career, savings will accumulate even faster.

Use Other Accounts

There is no rule that says you must use HSA funds before you use other monies to pay for health care. If you can afford it, then you might be further ahead to pay for medical costs without using HSA funds. Then, the roll over from year to year will be greater and the compounding effect will be enhanced.

Don't Touch

Though it will be tempting, from time to time, to use HSA money for some large expense beyond health care, don't do it. The penalty for doing so is 20% over and above the tax you will pay by claiming the withdrawal as income. Leave the money where it is, unless you need it for health care.

Coming Out Ahead

If you start early and save diligently, an HSA could be the best retirement plan you invest in. Remember that HSA funds can be invested, so don't be afraid to go for mutual funds or other investments just as you would with other retirement income. Remember that you are investing in your health with this money, so treat it with the respect it deserves.

Ron Sheffer researches money matters in the healthcare industry. He often blogs about his insights to help people make smart decisions.

To Buy or to Lease?

The UK automotive industry is beginning to pick itself up from the dark financial times experienced in the last few years. Car sales have continually increased month-by-month for over a year and a half, the industry is currently one of the strongest in Britain and has become widely regarded as one of the key reasons we avoided a triple dip recession. Aside from purchasing new cars, hiring and leasing vehicles are becoming a particularly attractive proposition in the UK. At CarMax, we believe that now is the best time to take advantages of the strong car market, but what option is best for you – buying or leasing? 

Leasing

So what exactly is leasing? A lease is essentially a rental or hire agreement between two parties where a fixed monthly rate is paid during a set period – the length of time can vary from a few months to years. Once the leasing timeframe has passed, you simply hand the car back. It has been popular alternative to purchasing a car in the US for a number of years, but the appeal has increased in the UK in recent times.

This attraction can largely be attributed to driving away in cars that may be out of your normal price range, you often see BMW’s or Mercedes-Benz as popular choices when leasing cars. Furthermore, the leasing of cars enables you to drive a new car every couple of years due to returning cars once the leasing period expires. There are financial gains to make via leasing too, the monthly payments are traditionally more affordable in contrast to typical car finance options – however it is important to note that this does not always prove to be the case.

Buying

Research carried out by Which? looked at the cost of buying and leasing different car models, they found that traditional car financing options when buying a new car were still the more cost-efficient in most cases. This has been reinforced in the current high consumer confidence in the car market; sales of cars have recently hit a 5-year high – putting the UK automotive industry as one of the leaders in the wider European market. A large portion of the continued rise in sales comes from the various different car-financing options available.

Coming out of the rough financial times, the amount of people looking to use credit as a means of purchasing a new car has sharply risen to a record high of 75 percent. Car financing provides an easier and more beneficial means for the purchase of cars, however looking to secure the right financing package to suit you can still be an extremely stressful process. At CarMax finance, we specialise in offering excellent, affordable car finance regardless of your credit status. We hold the belief that everyone deserves the right to buy a new car; therefore, we are proud to assist you in securing bad credit car finance through our excellent service.

We acknowledge that leasing cars has its advantages; however, nothing beats the feeling of owning your own vehicle. Across the country many people are realising the incredible gains of owning your own car, the continuous growth of Britain’s motor industry over the last 19 months reinforces that purchasing your own car is still the more attractive option. Our car finance packages help with the considerable expense of a car, making CarMax Finance the only option to consider when buying a new car.

Top 5 Best Investment Ideas and Tips for Beginners

New to investing? Learn about various investment tools here and find out how to start investing your money.

As a beginner investor, navigating through the many different investment options available out there can be very difficult and a scary experience. Different types of investments carry with them varying amounts of risk and reward. There are a large number of potential investment pitfalls that can befall the unwary, first-time investor. To make things easier for you, here is a list of the top 5 best investment ideas for beginners. 

Top 5 Best Investment Ideas and Tips for Beginners: 

Real Estate

Despite the recent falls in property prices, real estate remains a good investment. It’s actually one of the well-protected investment options that keep on thriving and flourishing, even in developing nations. Real estate lets you combine the huge benefits of leverage with property value appreciation over the long term. 

The value of property typically increases over time, resulting in increased equity and creation of wealth. Also, the growth in value your investment experiences is sheltered from tax until you liquidate the property. Additional tax benefits can be realized through value-added tax deductions such as ability to deduct operating costs and cost of financing. 

Gold

As a beginner investor, it’s wise to invest in gold. This is simply because it provides an excellent hedge against inflation. In times of economic crisis, the government typically prints more currency. This results in increased money supply, which in turn causes inflation and ultimately decreased value of currency. Investing in gold provides a great way to secure your investments, as when the true value of currency decreases, the value of gold invariably rises. 

Today’s interconnected world economy means the economies of major countries are intrinsically linked. When the economy of one major country suffers, there is a knock on effect and major stock markets suffer as well. When stocks and shares fall, majority of investors usually choose to buy gold, which causes its prices to rise.

Forex

Forex investing offers the best return on investment. But the risks are higher compared to other forms of investments. Conventional investments, such as stocks, mutual funds and bonds, provide a good way to earn money from one’s savings. However, forex trading is more profitable compared to these investments. It’s also much less complicated and demanding but as profitable, if not more. 

With forex trading, you don’t have to monitor hundreds of stocks or wait for months to realize profits. You can make money huge amounts of money from trading in just a few currency pairs within a very short period of time. This is because the Forex market trading hours are a 24-hour, commission-free market that has no short-selling restrictions. 

Insurance

Investing in insurance products is a great way to ensure that you’re well taken care of in times of emergency as well as during retirement. Insurance policies that come with an investment feature offer significant tax benefits, as the earnings on the plan are not usually taxed. These policies also provide a wide range of investment options, such as stocks, mutual funds, bonds and money market accounts. 

Additionally, they offer unmatched flexibility, where the plan may be increased with a lump-sum payment or borrowed in the event of a medical emergency or any other pressing financial need.

Your Employer’s 401k

Majority of employers offer a 401k plan through which employees can make their contributions toward their retirement savings. However, many employees don’t take full advantage of their 401k plan. Don’t be like them, as there are many benefits that you can accrue from investing in your company’s 401k. 

Contributing part of your salary to your employer’s 401k plan will allow you to enjoy a number of benefits, such as a tax break, tax-deferred growth, and a possibility of a matching contribution from your employer. To get maximum benefits, consider contributing approximately 20% of your income to your 401k, and avoid tapping into your 401k to meet your immediate cash-flow needs.

Conclusion
Lastly, it’s important to note that there is no guarantee that you’ll make money using any of these ideas. To succeed, you need to take the time to learn about the fundamental principles of each of these investment options as well as the right strategies that can help you make money. Also, remember you don’t have to invest in all of them to succeed. Just choose one or two options that you are most comfortable with and stick with it.

Invest in the Stock Market But First Learn the Basics

1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia)

A stock is essentially a small share of a company. The percentage of ownership of a company that you get in exchange for the purchase of a stock is dependent upon many factors, including that company's industry, its stock share, and its history with business growth. Stocks are considered to be an equity investment, and whether you're looking to eventually build a significant savings out of stocks or simply have some fun, choosing to take some money and invest in the stock market can be a smart and exciting prospect. By claiming a share of a company's assets and profits, you're essentially hitching a ride along with their corporate big-time-earners, which means that the more they make, the more you make. This is one of the top five stock investment tips: buying more of a company's stock means playing more of a role in ownership, and thus earnings.

Common types of invested stocks provide shareholders -- those are the people who purchase stocks from the company -- with some voting rights, but no actual promise of profits from the company. A preferred stock, on the other hand, almost always guarantees you'll see a return from it, but you won't have voting rights within the company. If you don't mind not having a say in the direction a company goes, but you definitely want to earn a share of its profits, then a preferred stock is, without a doubt, the better choice.

Once upon a time stock shareholders had actual paper certificates verifying their ownership of stocks. These days, the purchase and trade of stocks are recorded digitally, and assuming you're using a brokerage firm to assist with the management of your stocks, they're the ones whose name will be on the stocks, even though you are the one who owns them.

Before purchasing a stock, it's important to know the basics. When ordering a stock, you can do so via a limit order, a market order, a stop order, a stop-limit order, or a trailing-stop order. Each of these types of stock ordering methods are different, but result in the same thing: obtaining one or more stocks for you. Remember, the more stocks you purchase from a company, the more ownership you have in that company. But sometimes it pays to purchase just one or two from each company, though in some instances owning multiple stocks can definitely be much more lucrative. An experienced brokerage firm can help you make the right choice in the number of stocks you buy from companies.

Grounds for Seeking Business Debt Help

Financial mistakes are a common thing that takes place when you run a business of your own. No single entrepreneur can run a business successfully without making a single financial mistake throughout his life. Mistakes happen and we learn from that. However, there are times when it gets very difficult to find out the correct way to come out of financial debts. The amount of debt sometimes keep accumulating wherein they reach such a point that it becomes way beyond your affordable limit to pay off the debt to the creditors. In such a situation, it is extremely necessary that you seek for a business debt help from a well-known debt consolidation company.

Top Reasons for Taking Business Debt Help

You might be having sleepless nights as the creditors are continuously chasing you for money. You are getting harassed day in and day out. The situation has reached a level where your creditors won’t stop harassing you until they receive their money back from you. Arguing with them is of no use as the calls keep coming from the customer care department and every time it is a different person who you have to deal with.

Bearing harassment regularly is something which is too disgusting and hence it is better to reduce the creditors. The best way for you would be a commercial debt negotiation with your creditors so that they come to an agreement to sort out your debt issue. This will stop the harassment right away.

On contacting one of the debt consolidation companies, you will be able to bring some reduction in your high rate of interest. They are the right people who can negotiate with your creditors on your behalf. It is very important as they will help you largely in getting your interest rate reduced quickly so that you can pay off the debt faster.

Debt consolidation companies come to big help as they can play a vital role in reducing your late fees and limit the same. They through their years of experience have learnt how to deal with the creditors and will do everything possible in order to get you out of your debt related problems.

The precarious financial situation stands as a hindrance for many individuals as they do not have the money to pay off the debts. This is where you can take business debt help from a debt consolidation company who will negotiate in their way to bring some reductions in your payment plans that is completely suitable for your situation.

The debt consolidation companies also offer you with a plan keeping into account your income and expenses, and your creditors whereby they try to offer you as much as help possible in order to save your maximum money.

You have to pay a certain amount of fee to the debt consolidation company for their suggestion. Some of them won’t charge you anything for their initial consultation. So fetch one of them and resolve all your debt issues instantly today! What are you waiting for?

Looking To Update? 5 High Return Upgrades For Your Home

The one question that many homeowners ask themselves is if the renovation project that they are choosing to complete will give them a big return on the value of their home. In the event that you one day choose to put your home on the market, you'll want to make upgrades that will increase the value of your home rather than to decrease it or simply keep it the same. High return upgrades for your home may even cost less to install and complete than the huge return that you'll see when selling your house. Major upgrades may even help your home to sell faster than others homes on the market that simply do not have everything that you are offering. From improving the overall curb appeal to renovating rooms on the inside of your house, these top 5 upgrades are sure to increase your homes value in no time.

Home Security Systems

One thing that many people want, but don't want to take the time to install themselves is a home security system. By choosing to upgrade your house with services from a local home security company, you will see the value and return price on your house increase immediately. Vivint home automation not only provides you with a safer place to call your home, but also enables you to easily control different aspects of your house with ease such as the lighting, temperature, door locks and much more.

Kitchen Renovations

One of the first rooms in your home that you should to renovate for a high return value is the kitchen. Kitchens are one of the first rooms that potential home buyers look at. When undertaking a kitchen project, it is important to not go overboard. You do not want to have an extremely expensive kitchen in a neighborhood with average priced homes. Choose small upgrades to give your kitchen a face lift such as granite counter tops, stainless steel appliances and new lighting fixtures.

Attic Bedrooms

Turn your attic into a bedroom for a 73 percent return of your investment. This adds additional square footage to your home and may be a great option for those who are looking for more bedrooms than you previously had to offer.

Bathroom Remodels

Typically, a bathroom remodel project yields an average of a 62 percent return. Many potential home buyers are looking for large, updated master bathrooms that include double sinks, a large soaking tub, walk-in shower and good lighting. Updating your bathroom by installing these features and adding to the space can be a huge plus to buyers.

Outdoor Space

While a swimming pool may not increase the overall value of your home as this is not something that everyone is looking for, simply updating the outside of your house to increase the curb appeal can give you a high return percentage. Give your home a fresh coat of paint, plant shrubbery and beautiful flowers and even opt to give your backyard a deck or patio where you can enjoy spending the day outdoors.

With these great tips on updating your home, you sure to see a high return value if you ever choose to sell. Other great update options include second floor additions, home office space and sun rooms.

Brionna Kennedy is native to the Pacific Northwest, growing up in Washington, then moving down to Oregon for college. She enjoys writing on fashion and business, but any subject will do, she loves to learn about new topics. When she isn't writing, she lives for the outdoors. Oregon has been the perfect setting to indulge her love of kayaking, rock climbing, and hiking.