Tag Archives: Pre-Tax

Why we like HSA accounts? (Part 1)

There are fewer tax favorable investments and write-offs/pre-tax investments today as the tax code has become stricter and some of the favorable stimulus tax savings have sunset.

One of our favorites tax savers DOES still exist!

HSA Accounts

A Health Saving Account (HSA) is available to individuals and families who have a high-deductible health insurance plan. Not sure if you do, the safest, easiest way to find out is to make a call to your Health Insurance provider as they will know instantly.

Contributions to a HSA are pre-tax and grow tax deferred until use. Best of all, no matter your income, HSA contributions are not phased out or lost at higher income levels.

This from HSA Bank, one of our favorite providers (more on this in Part 2)

hsa-bank-2016-limits

You can even make a 2016 contribution in year 2017, similar to an IRA, however the record keeping is challenging and we prefer correct year/non-delayed HSA funding.

In addition to these limitations, you cannot fund an HSA account once you have Medicare coverage! But you can still use these pre-tax funded dollars for qualified medical expenses ….
OR save them for future use ….To be continued….

Have a Great TAX SAVINGS day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

http://www.jkfinancialinc.com

http://www.street-cents.com
 

Favorite Question of the Week from the Field; Zigg Still on Vacation

With our friend Zigg still on his island and his friends intent on staying for a while, we decided to shift gears and discuss our favorite question of the week.  This week’s question derives its origin from several conversations we have had lately with client’s, making it topical for discussion.

Should I only put the amount the company matches in my 401k? and a follow-up question,  Should I put extra, non-pre taxed funds into my plan?

NO and NO !

We recommend you put as much as possible in your company 401k even if there is no match at all. There are various restrictions such as compensation and general government caps which limit contributions, but putting as much PRE-tax funds into your 401k as possible, is our recommendation.

Various plans allow you to continue after-tax contributions to retirement plans, which we are not advocates of doing.  Most plans do not have the ability to provide for specialized allocations which may be more appropriate for investment.  Don’t bypass saving these extra dollars and spend!  Just save these funds in a more self-directed manner. 

In closing, just because Zigg is on vacation, does not mean there are not sharks out there, keeping our guard up for an “Event” is still a good idea, however, economic, consumer, and earnings (more discussions soon) look very good!

Have a Super Day and a Great Weekend!

JK

214-706-4300

www.jkfinancialinc.com