I am meeting with a small contractor (6 employees) soon. He does not have a large income, and has no group insurance at all. I am planning on suggesting he set up HDHP/HSAs for everyone, including himself with the added bonus of providing a type of "virtual" retirement savings plan through the HSA since he provides no retirement benefits. Is this acceptable? Or do I just discuss the the tax advantages and let him draw his own conclusion?
Can you suggest HSA's as a virtual retirement plan?
- Thread starter retread
- Start date
- 159
Re: Can U suggest HSAs as a virtual retirement plan?
I would sell him on the benefits on the insurance first and foremost because they don't have insurance.
Then I would say the bonus of this plan is you can save on your taxes each year and pay for medical expenses with tax free money and you can illustrate over the next so many years how much he would have saved in taxes and if he doesn't use the money he will have it for retirement.
I would throw on accidents plans since they are contractors and the possibility of them going to the emergency room with their occupation is going to be higher.
Not sure where you are located are you trying to do this with IFP plans or a group?
I would sell him on the benefits on the insurance first and foremost because they don't have insurance.
Then I would say the bonus of this plan is you can save on your taxes each year and pay for medical expenses with tax free money and you can illustrate over the next so many years how much he would have saved in taxes and if he doesn't use the money he will have it for retirement.
I would throw on accidents plans since they are contractors and the possibility of them going to the emergency room with their occupation is going to be higher.
Not sure where you are located are you trying to do this with IFP plans or a group?
- 596
Re: Can U suggest HSAs as a virtual retirement plan?
I'm not advocating going out a pitching HSAs as a retirement plan, but I do disagree that it shouldn't be considered one. I personally contribute the max to my HSA first ($2900 this year as a single), even before contributing to a Roth. It's the only savings plan I can think of that I will never have to pay income taxes on the contributions and distributions.
I'm not advocating going out a pitching HSAs as a retirement plan, but I do disagree that it shouldn't be considered one. I personally contribute the max to my HSA first ($2900 this year as a single), even before contributing to a Roth. It's the only savings plan I can think of that I will never have to pay income taxes on the contributions and distributions.
Re: Can U suggest HSAs as a virtual retirement plan?
Tht's fine, my main point, is that the amount you're able to put away is not nearly enough for what you'll need or want at age 65 (I know you already know that).
I'm also not a fan of any qualified plan b/c I think IRA's/401k's are just a really good retirement plan for the government, and not the individual. My bias and logic kick-in too fast!
Just spewing my 2 cents!
Tht's fine, my main point, is that the amount you're able to put away is not nearly enough for what you'll need or want at age 65 (I know you already know that).
I'm also not a fan of any qualified plan b/c I think IRA's/401k's are just a really good retirement plan for the government, and not the individual. My bias and logic kick-in too fast!
Just spewing my 2 cents!
- Thread starter
- #6
Re: Can U suggest HSAs as a virtual retirement plan?
I realize an HSA is not a sufficient retirement plan... I agree with the replies. It is just that this guy has NOTHING and very little money. I want him to at least get started. We can build from there over the next several years. I just wanted some feedback on whether the pitch is ethical, legal, and correct.
I think it is in my mind, I just want an objective viewpoint. My purpose is to get him thinking in terms of long term goals.
... and as to IFP vs group: I am not sure he is going to be willing to commit to an HRA. It seems more likely he will go for a HSA IFP proposal. I may be wrong.
I realize an HSA is not a sufficient retirement plan... I agree with the replies. It is just that this guy has NOTHING and very little money. I want him to at least get started. We can build from there over the next several years. I just wanted some feedback on whether the pitch is ethical, legal, and correct.
I think it is in my mind, I just want an objective viewpoint. My purpose is to get him thinking in terms of long term goals.
... and as to IFP vs group: I am not sure he is going to be willing to commit to an HRA. It seems more likely he will go for a HSA IFP proposal. I may be wrong.
Last edited:
- 3,863
Re: Can U suggest HSAs as a virtual retirement plan?
Where is this money supposed to come from to fund the HSA?
They have no insurance now and low income.
I am not sure they will grasp this concept.
Where is this money supposed to come from to fund the HSA?
They have no insurance now and low income.
I am not sure they will grasp this concept.
- Thread starter
- #8
Re: Can U suggest HSAs as a virtual retirement plan?
I had in mind trying to get them to at least fund it with $20 or so, then DRIP on them to keep it up until it gets to a viable level.
"The journey of a 1000 miles begins with the first step" ---old Chinese proverb
I had in mind trying to get them to at least fund it with $20 or so, then DRIP on them to keep it up until it gets to a viable level.
"The journey of a 1000 miles begins with the first step" ---old Chinese proverb
Re: Can U suggest HSAs as a virtual retirement plan?
Infinite Banker? Missed Fortune? What "program" do you sell?
Infinite Banker? Missed Fortune? What "program" do you sell?
- 242
Re: Can U suggest HSAs as a virtual retirement plan?
Keep in mind who you're talking about.... a SMALL EMPLOYER. There are ONLY two reasons that ER's bother with health insurance for EE's.... to recruit EE's and retain EE's.... focus on the facts that this accomplishes BOTH goals.
I would certainly put the retirement aspect in the bullet points of how why an HSA is an attractive vehicle.... payment of premiums after 65, etc.... these are all "retirement" style "issues" without comparing it directly to a "formal-retirement" plan.
In other words, the retirement "features" are a part of what makes the HSA attractive... so to leave it out would not be telling the whole story.... or something like that.... it's too damned late!
Keep in mind who you're talking about.... a SMALL EMPLOYER. There are ONLY two reasons that ER's bother with health insurance for EE's.... to recruit EE's and retain EE's.... focus on the facts that this accomplishes BOTH goals.
I would certainly put the retirement aspect in the bullet points of how why an HSA is an attractive vehicle.... payment of premiums after 65, etc.... these are all "retirement" style "issues" without comparing it directly to a "formal-retirement" plan.
In other words, the retirement "features" are a part of what makes the HSA attractive... so to leave it out would not be telling the whole story.... or something like that.... it's too damned late!
Similar threads
