Pub. 8 2018-2019 Issue 3

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S W hen recently on va- cation, I entered into a discussion with another couple and we shared our career backgrounds. The conversation led to how health savings accounts (HSAs) can be a key tool for retirement spend- ing. As we all saw ourselves moving closer to retirement, the discussion and questions grew into the topic of using ac- cumulated HSA assets for long term care expenses. Using HSA Savings in Re- tirement The cost of health care for a married couple during re- tirement is estimated to range from $250,000 to $400,000. HSA owners can use their HSA savings for qualified medical expenses at any age, but let’s consider a few ways to use these assets in retirement (after turning age 65) and how they are taxed. • Qualified medical ex- penses—tax-exempt • Medicare premiums— tax-exempt • Qualified long-term care insurance premi- ums and qualified long- term care services— tax-exempt • Qualified medical ex- penses that occurred previously and were paid out of pocket (but after the HSA was es- tablished)—tax-exempt • •Supplemental income for nonqualified ex- penses, such as home expenses, travel, or gifts for friends and family—taxed as or- dinary income, but no 20 percent penalty tax after age 65 Qualified Long-TermCare One concern many of us will have during retirement is long-term care. HSA assets can be used for qualified long- term care insurance premi- ums and qualified long-term care services. Here are a few services that can be paid with HSA savings. • Payments for in-pa- tient hospital care • Payments for residen- tial nursing home care for medical reasons (If the main reason for HSA Savings for Long-Term Care in Retirement FEATURE ARTICLE BY STEVE CHRISTENSON, EXECUTIVE VICE PRESIDENT, ASCENSUS® One concern many of us will have during retirement is long-term care. HSA assets can be used for qualified long-term care insurance premiums and qualified long-term care services.   continued on page 8