Why you should invest to stay ahead

You know you should save for retirement, and you know that you’ll likely spend more in medical expenses as you age. But in these uncertain times brought on by the COVID-19 pandemic, a growing number of questions arise: How much do you need for unexpected expenses? Will you have enough? How can you save more to cope with financial unpredictability?

Health care expenses are one of the biggest financial worries in retirement. It’s estimated that the average 65-year-old couple will spend about $285,000 in health care and medical expenses throughout retirement.1 No matter where you are in your journey, it’s never too late to start saving and investing. A health savings account (HSA) is a smart investment vehicle that could play an important role in building financial wellness.

The power of an HSA
An Optum Bank HSA provides more than health cost savings. It’s a smart investment option that can help you build a financial plan and prepare for unexpected health costs. An HSA is designed to work with a qualifying high-deductible health plan (HDHP). The money goes in on a pre-tax basis through payroll contributions, grows income tax-free and comes out income tax-free when you use it for qualified medical expenses. HSAs are portable and have no “use it or lose it” rule, so these dollars can be accessed at any time. You can carry over available funds from year to year and the account is yours to keep even if you change jobs or retire.

The future is in investing
Once your HSA reaches a certain designated balance, typically $2,000, you may choose to invest a portion of your HSA dollars. Since the beginning of 2020, we have witnessed account holders continuing to invest their HSA dollars — which may mean that those who are healthy or putting off medical procedures are continuing to save during the COVID-19 pandemic.

Mutual funds: Optum Bank offers a diverse set of mutual funds that average a four-star Morningstar rating and represent some of the lowest expense ratios in the industry. Once your HSA reaches the investment threshold, you may choose to invest a portion of your HSA dollars in mutual funds, including Vanguard funds, largest date funds and lifestyle funds.

When you set up your Optum Bank investment account, you can choose how you want the funds to be allocated among the available mutual funds. Our asset allocation calculator can help you decide which funds are right for you. There is no minimum initial investment amount required by mutual funds.

Online financial advisor: In addition to mutual funds, Optum Bank is offering automated online advice and investing through Betterment, the largest independent online financial advisor. Betterment combines low-cost, tax-efficient investment strategies with technology and personalized advice to empower you to achieve your financial goals.

Tools at your fingertips
To help connect your health outcomes and finances, Optum Bank makes it easy to manage your account through our website and app resources, where you can deposit funds and calculate contributions. You can also engage with our Health Finance Journey™, a one-of-a-kind model that uses advanced data and analytics to help account holders move from deciding to open an HSA to using, managing and optimizing its tax-free advantages. Each stage is an important step toward health and financial well-being.

During these uncertain times, it’s vital to save for future health care expenses, both planned and the unexpected. Saving in an HSA for retirement gives you a tax-advantaged account dedicated to future medical expenses — allowing you the opportunity to avoid dipping into retirement accounts intended for cost-of-living expenses. You may not know exactly how much you will need for health care and medical expenses in retirement, but saving and preparing for the future can help lower stress and anxiety associated with health expenses — enabling you to make better health decisions now and in the future.

About the author

Barb Page
Vice President, Optum Financial Services

Barb Page is the vice president of marketing for Optum Financial Services (OFS). In this role, Barb is responsible for the marketing strategy and execution for OFS and Optum Bank. She brings over 30 years of financial services experience and health care expertise to the marketing arena for Optum. Barb has a master’s degree in business communications and a Master of Science in health care leadership.

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Source
1According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2019 may need approximately $285,000 saved (after tax) to cover health care expenses in retirement.

Investments are not FDIC insured, are not guaranteed by Optum Bank®, and may lose value.

Health savings accounts (HSAs) are individual accounts offered or administered by Optum Bank®, Member FDIC, and are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Fees may reduce earnings on account. The content of this communication is not intended as legal or tax advice. Federal and state laws and regulations are subject to change.

Mutual fund investment options are made available through the services of an independent investment advisor. Shares are offered through a registered broker-dealer. Orders are accepted to effect transactions in securities only as an accommodation to HSA owners. Optum Bank is not a broker-dealer or registered investment advisor, and does not provide investment advice or research concerning securities, make recommendations concerning securities, or otherwise solicit securities transactions.

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