retirement – Carol H Cox

By Carol H Cox

Are you a parent or grandparent considering co-signing on or taking out a student loan for your child or grandchild? Well, you may first want to read a new study on this matter.

In January of 2017, the Consumer Financial Protection Bureau (CFPB) released a sobering study called “Snapshot of Older Consumers and Student Loan Debt.” (In the study, “older consumers” are categorized as those being age 60 and older.) Between 2005 and 2015 the number of older consumers carrying student loan debt, meaning either co-signing on or taking out student loans directly, has increased by a factor of four, to 2.8 million Americans. These older consumers are responsible for a total of $66.7 billion of student loan debt, including federal Parent PLUS loans and private student loans.

Continue reading “Older Americans Taking on More Student Loans”

By Carol H Cox

Photo: www.TaxCredits.net

The Health Savings Account (HSA) came into being as part of the Medicare Modernization Act of 2003. An HSA is designed to be used as a savings storehouse for medical expenses, current and future. The contributions to the HSA can be used to pay medical deductibles and out-of-pocket maximums in tandem with a High Deductible Health Plan (HDHP). You can open an HSA on your own once you are covered by an HDHP and meet other requirements, see below.

An HSA can also provide a nice tax-break and a tax-free means of saving for medical expenses in retirement. And the extent of contributions to an HSA isn’t limited by the contributor’s income tax bracket.

One of the beauties of an HSA is that, if you follow IRS rules, the money you place into the account is tax deductible and/or any money your employer contributes is excluded from your gross income. In addition to this, money you withdraw from the account (including any earnings from investments) used to pay for qualified medical expenses is also tax-free. If you can fully fund the account annually and resist using the money in the account until you retire, an HSA can grow to a sizable amount in a few years.

Continue reading “Benefits of an HSA”