Blog   Tagged ‘health savings account’

Your culture drives innovation

  |  Posted by

Mike Hagedorn is back to expand on the idea of company culture. This time, he highlights the importance of allowing your culture to drive innovation.

Continue Reading


Mr. Hagedorn is president and chief executive officer of UMB Bank and vice chairman of UMB Financial Corporation. Prior to this role, Hagedorn served as chief financial officer and chief administrative officer of UMB Financial Corporation. He joined UMB in March 2005.



Leave a Comment

Tagged: , , , , , , , , , , , , , ,

Building long-term wealth with your HSA

  |  Posted by

So you know what a health savings account (HSA) is and that you can use it for long-term savings. Now what? How exactly do you use your HSA as a savings tool? You can use them as a compliment to your retirement strategy to build wealth for qualified2 medical expenses, including tax-free Medicare premiums.

Continue Reading

Don’t sell yourself short

According to the Devenir Year-End 2012 survey, the average HSA individual account balance was $1,807. Most people aren’t taking full advantage of their HSA. The IRS allows a maximum HSA contribution of $3,250 for individuals1 or $6,450 for family1 coverage for 2013 (plus a catch-up amount of $1,000 more for people over 55 years old).

Medical costs are a major financial burden for retirees. Fidelity’s widely-recognized annual study shows an average healthy couple retiring in 2012 at age 65 needed $240,000 for out-of-pocket health care costs (after Medicare and not including long-term care costs).

Everyone faces the possibility of high medical costs in their later years so you should start planning sooner rather than later. Starting to save earlier adds more to savings, and delays limit the amount of the nest egg. Long-term returns may vary, but like all savings plans, it’s always a good idea to start early.

Gain triple tax advantages

It’s also a good idea to always first take advantage of any offered match for your HSA or 401(k). While many further invest in their 401k or IRAs, your HSA may be a more appealing choice in terms of flexibility, tax advantages and long-term growth potential.

It’s important to consider taxes in long-term investing because of the compounding of savings. The comparison chart below shows the key tax considerations for each type of account.

 Building long-term wealth with your HSA

 * Not taxed if funds are withdrawn for qualified medical expenses.
**  Tax references are at the federal level.  States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. If you have questions about your tax implications, consult your tax advisor.
***
Investment products are not FDIC insured, have no bank guarantee, and may lose value.

HSAs have the potential to offer triple tax advantages for individuals – something not seen in other retirement accounts. Only an HSA offers tax benefits at deposit**, during the account’s life and upon a qualified2 medical expense withdrawal. So a person saving for future medical needs can avoid taxes at all three stages in this life cycle.

Invest for long-term growth

Major HSA providers now offer multiple investment options. Learn more about what kind of investment options are available with your employer’s HSA. If your HSA encourages long-term savings, consider participating in the multiple investment options available. And take advantage of any tools offered by your employer to help you plan for the future, including investment objectives, risk tolerance and mix of assets across all accounts.

You have an opportunity to prepare for future health care expenses during retirement or later in life. Start learning more about your employer’s HSA and how you can use it to your advantage.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 

1 If you do not meet HSA eligibility requirements for the full tax year, you may not be able to contribute the maximum amount. Please consult your tax advisor or employer for more information.

2 Qualified medical expenses are those defined under Section 213(d) of the Internal Revenue Code.

 

Investments in securities, whether through a Money Market Sweep Account or through a Self-directed Brokerage Account are:

Not FDIC-Insured • May Lose Value • No Bank Guarantee.

 Securities  through your self-directed HSA brokerage account are offered through UMB Financial Services, Inc., member FINRA (www.finra.org), SIPC (www.sipc.com).  UMB Financial Services Inc. is a subsidiary of UMB Bank, n.a. UMB Bank, n.a. is a wholly owned subsidiary of UMB Financial Corporation. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks.


Dennis Triplett is chief executive officer of UMB Healthcare Services. He is responsible for the strategic direction in healthcare banking and manages the sales and marketing activities, plus product development and relationship management. Dennis has more than 29 years of experience in the banking industry. He currently serves as board chairman for the Employers Council on Flexible Compensation, chairman of America’s Health Insurance Plans’ HSA Leadership Council and a charter member of the American Bankers Association’s HSA Council.



Leave a Comment

Tagged: , , , , , , , , , , , , ,

Making the most of your HSA

  |  Posted by

As health savings accounts (HSAs) become more popular with employers and employees, you should be well-informed about the benefits and rules around this option. For example, did you know you can use an HSA as a savings/investment tool? Most HSAs are tax-advantaged, offer investment options and you can use them in retirement planning.

So, what else do you need to know? To get the most out of an HSA, you need to understand some of the long-term benefits of this health care savings strategy and what options are available when you sign up for an HSA.

Continue Reading
  • Move past the “use it or lose it” mentality

    HSAs are different than flexible spending arrangements (FSAs), because your unused HSA balance rolls over from year to year so you will not give up the money and your account may grow over time. FSA funds that aren’t used by the customer within a certain time period are lost.Here is an example of how an HSA can be used to save for future expenses.You’re a generally healthy, 20-something male who doesn’t have many major health care expenses. You would like to save for future health care expenses for when you start a family or possibly for when you are closer to retirement age and are more likely to have substantial health care costs. You should consider an HSA.

  • Take a long-term view

    Eligible HSA deposits are tax-deductable, earnings grow tax-free‡(1), and withdrawals for qualified medical expenses are tax-free1. These features may make the HSA a more appealing choice than other tax-advantaged financial instruments such as an IRA. With an IRA, you will pay income tax on your withdrawals used to pay for medical expenses and you may have to pay a penalty for withdrawing money too early. If you withdraw from an HSA for a non-qualified medical expense, you will have penalties and tax implications similar to an IRA.Many HSAs offer investment options. You can invest part or all of your HSA into money market accounts‡(2),or self-directed brokerage accounts (3) for mutual funds or individual stocks. Like all investments, other factors will determine the actual returns on those made within an HSA, but the reality is that these options are underutilized by most HSA accountholders.

  • Learn more and determine next steps

    If your company offers a high-deductible health insurance plan with an HSA, talk to your benefits department about what is included with the HSA. Determine if an HSA is right for you at the time. Many benefit partners will offer “people like me scenarios” to give you a better idea of how you can benefit from an HSA.Here is another example of how an HSA can be used to save for future expenses within a shorter timeframe.

    You’re a woman in your 50s and you are preparing for your retirement in the next 10 to 15 years. You have noticed that your health issues are more frequent and more expensive. You realize that the HSA makes the most sense for you to start investing in now, while you’re still eligible. You also learn that you can make a catch-up contribution to your HSA since you are over age 55. It’s not too late for you to consider an HSA.

To learn more, click here.

UMB CFO Mike Hagedorn discusses the innovation of HSAs and how they have become an important part of the payments industry. He explains the distinction between product and innovation and how a company can poise itself to be a leader in innovation.

 

1All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions.  Please check with your state’s tax laws to determine the tax treatment of HSA contributions, or consult your tax adviser. Neither UMB Bank n.a., its parent, subsidiaries nor affiliates are engaged in rendering tax advice.

2 Contributions up to the $1,000 peg balance are FDIC insured.  Any funds over the peg balance that are swept into a money market mutual fund are not insured or guaranteed by the FDIC or any other governmental agency.  Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market mutual fund.

3 Investments made through your HSA Self-Directed brokerage account are not FDIC insured.  Investments offered through UMB Financial Services, Inc., member FINRA, SIPC.  UMB Financial Services, Inc. is a subsidiary of UMB Bank n.a.  UMB Bank n.a. is a wholly-owned subsidiary of UMB Financial Corporation.  UMB Financial Services, Inc. is not a bank and is separate from UMB Bank n.a. and other banks.

Investments in securities, whether through the money market sweep account or through other investment options available in the self-directed brokerage account are:

Not FDIC-Insured · May Lose Value · No Bank Guarantee

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Dennis Triplett is chief executive officer of UMB Healthcare Services. He is responsible for the strategic direction in healthcare banking and manages the sales and marketing activities, plus product development and relationship management. Dennis has more than 29 years of experience in the banking industry. He currently serves as board chairman for the Employers Council on Flexible Compensation, chairman of America’s Health Insurance Plans’ HSA Leadership Council and a charter member of the American Bankers Association’s HSA Council.



Read One Comment

Tagged: , , , , , , , , ,