Advisor Today - March/April 2016 - (Page 21)

PRODUCT SPOTLIGHT 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. I 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 tax-free fashion. 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
New Products
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"
Smooth Sailing
Taking Incremental Steps Toward Success
Investment Strategies for Today’s Consumers
How Tax Efficient is Your Investment and Retirement Portfolio?
Naifa News
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
Advertiser Index
Back Page

Advisor Today - March/April 2016