However, if you are eligible for an HSA, this account can be a particularly attractive alternative to 401 (k) for one simple reason. Not only can you make tax-deductible contributions, but you Also get tax-free withdrawals for qualifying health care expenses. So you get a double tax benefit with an HSA, while a 401 (k) or Roth or traditional IRA only offers tax breaks when you contribute. Where make withdrawals, but not both.
If you don’t need the money in your HSA for healthcare expenses, you can withdraw it for any reason after age 65 without penalty, but you will be taxed on withdrawals as if you withdraw money from a 401 (k) in this situation. Since many seniors incur high healthcare expenses, many of them can take advantage of the additional tax benefits offered by this account. This makes it an ideal 401 (k) alternative.
Whichever option you choose, it’s important to take advantage of some of the tax benefits available for retirement savings, even if a 401 (k) isn’t available to you.
The $ 16,728 Social Security bonus that most retirees completely ignore
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