An Overwhelming Majority of Older Americans Are Missing Out on This Key Retirement Savings Tool
We're often told to save for retirement, especially since pensions are a rarity these days and Social Security doesn't provide enough income to sustain the average senior. And when we think about socking away funds for the future, it's common to focus on popular savings plans like IRAs and 401(k)s.
Both plans offer a host of tax benefits. In the case of traditional IRAs and 401(k)s, funds are contributed pre-tax to generate instant savings. Then, investment gains are tax-deferred until retirement, when withdrawals are taxed. Roth IRAs and 401(k)s work the opposite way. Though they don't offer immediate tax savings, they do allow for tax-free investment growth, and withdrawals in retirement are taken tax-free.
But there's another type of savings account you should consider when planning for your senior years: the health savings account, or HSA. Like IRAs and 401(k)s, there are a number of tax benefits to be reaped when you save in an HSA -- yet most middle-aged and older Americans don't have one at present.
Source Fool.com
