Advisor Today - March/April 2016 - (Page 21)
HEALTH SAVINGS ACCOUNTS
By Ryan Tiernan
Are You a Retirement Expert?
If you are, HSAs should be part of the products you offer to your clients.
s a designated hitter a great
baseball player? Is a long-drive
contest winner a great golfer?
While each of these players needs
these qualities for success, they need
much more than just these skills if
they aspire to be great.
In that same vein, my next question
is: Is a good financial advisor a
retirement expert? Do excellent
financial-planning skills automatically
make someone a retirement expert?
To answer this question, let's explore
what makes a retirement expert. A
retirement expert is someone who can
help clients navigate both the investment
markets and the challenges of saving
for what are often intangible, long-term
goals. The retirement expert keeps
clients on the right path and implements
strategies that are relevant to both the
accumulation and distribution of funds.
The retirement expert also sees the
value in giving timely advice that may
not be obvious to a client today, but in
time will become a focal point of longterm success.
The link between health and wealth
With that in mind, study after study
tells us that the largest deterrent to
long-term success in a retirement plan
is the rising cost of health care. In a
recent Nationwide/Harris poll, 63
percent of affluent pre-retirees said that
they are "terrified" of what health care
costs may do to their retirement plans."1
Now surely, these must be the
unfortunate folks who do not work
with a financial advisor. Correct? Not
so fast. The same study notes that "53
percent of older adults who have talked
to a financial advisor about retirement
said that it is important that their
advisor discuss health-care costs in
retirement with them; however, only 10
percent have had that discussion."2
So let's be clear: Health care cost
is the biggest potential impediment
When we lift the hood on the HSA, we find that it functions much
more like a 401(k) plan for health care costs than a traditional
health benefit. Helping clients navigate this account and its
interplay with their 401(k), IRA, annuities and other retirementfocused resources is truly the job of a retirement expert.
to a successful retirement plan.
Yet, only 10 percent of clients are
actually discussing this topic with
their retirement advisor. If that is the
biggest risk in retirement, why aren't
we addressing it head on and in a
manner that is effective and efficient
for our clients?
(HDHP), offers clients the ability to
save for current and future qualified
health care expenses in a truly triple
The tax advantages of HSAs make
high-deductible plans attractive
alternatives to more generous employersponsored health plans. When
implemented via an employer's salaryHealth savings accounts
reduction program or when addressed
One way to address this issue is to
after tax via personal tax filing, dollars
talk about health savings accounts. In contributed to the HSA are tax-free
2003, HSAs were signed into law and upon deposit to the account.
have since remained relatively under
These dollars can then be used for
the radar in the financial-services
current medical expenses, which are
community. But because of a host of
tax-free upon withdrawal or saved
recent trends, factors and legislation,
for future medical needs tomorrow,
they are now becoming common
months or even years from now. While
parlance in the health insurance
in the account, assets can be saved
world and are coming to a retirement as cash, or in most cases, they can be
conversation near you.
invested for the longer term.
The HSA, available when paired
And that is the real power of
with a High Deductible Health Plan
the HSA. The fact that funds in the
cont'd on page 22
March/April 2016 | ADVISOR TODAY 21
Table of Contents for the Digital Edition of Advisor Today - March/April 2016
From the Editor
A Question of Ethics The Details Often Make the Difference
What's Ahead for Financial Advising?
Whos's Saving the Most and Why?
Making the Case for Critical Illness Insurance
Are You a Retirement Expert?
Selling the "Best Plan"
Taking Incremental Steps Toward Success
Investment Strategies for Today’s Consumers
How Tax Efficient is Your Investment and Retirement Portfolio?
Ideas for a Profitable Practice
Crossing the Two Client Relationship Bridges
Working with Muslim-American Clients
Attracting and Serving Today's High-Net-Worth Clients
Becoming a Networking Success
Advisor Today - March/April 2016