We love answering questions from Federal Employees about their benefits. Our passion for financial planning with Federal Employees has provided us with a unique insight into questions that are often times top of mind for Federal Employees.
When Federal Employees ask us questions we take note of them. Often, we find that when one Federal Employee asks us a question there are so many others who want to know the answer too.
At FERS Federal Fact Check, we dedicate this section to answering some of the most common questions that Federal Employees have about their benefits.
Here is what we recently received,
A health savings account (HSA) is tax-advantaged savings account an individual or family. These accounts are designed to allow you to pay for qualified medical expenses on a pre-tax basis using the funds that you have accumulated in the account.
To be eligible for an HSA you must be in a qualified high-deductible health plan (HDHP) and they have an annual contribution limit. If you are not in a High Deductible Health Plan, you cannot participate in an HSA plan.
The IRS adjusts both the guidelines for HDHPs and the contribution limit every year.
Health Savings Account holders can contribute $3,500 for an individual and $7,000 for a family per year in the year 21.
HSA holders 55 and older get to save an extra $1,000 as a “catch up” contribution. These contributions are 100% tax deductible from gross income for those who qualified to have an HSA.
HSA’s were created in 2003 so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses.
HSA’s are 100% your funds… even in retirement.
They should be.
If you have a High Deductible Health Plan and are able to contribute to an HSA plan every year, you should. This not only provides potential tax benefits but it also allows you to accumulate funds within the account for use later.
To date, an HSA plan does not have an expiration date in which you have to use the funds. Imagine if you continually contribute to the account while you are young and able to afford health care from cash flow. In doing so you would allow the funds to accumulate. Later in life when your health may warrant needing funds you will have a nice savings account dedicated to this expense.
If you do not use the funds for medical purposes, you can still withdrawal them. However, in doing so you will be subject to taxes and potential penalties for doing so.
100% of the questions that we address in FERS Federal Fact Check come from Federal Employees.
If you have a question, let us know!
All questions remain anonymous.
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If you need more, specific advice please make sure that you reach out to us to let us know how we can help.
“Mr. Shilanski, Social Security Survivors Benefit question. I am under the FERS program and I plan to retire late this calendar year. I am 65 yrs old. I will have
I worked for the federal govt for 11 years. I was born in 1960 January. I was 56 at the time of separation. Need to know if postponement to a
At age 59 1/2, I would like to use a TSP one time withdrawal to pay off a mortgage then eventually transfer the balance to a IRA when I retire
Are you still allowed to contribute the maximum of $26,000 to the TSP even if you only work half of the year? Is there any advantage to maxing out your
Get the most out of your federal retirement benefits by taking advantage of the FERS resources created by Micah Shilanski, CFP®, and the team of independent financial advisors at Shilanski & Associates, Inc. Join the thousands of federal employees who trust us to guide them in their retirement planning journey because of our unique perspective of how your FERS benefits contribute to your comprehensive financial plan.
Year after year I see Federal Employees missing the same critical concepts in their federal retirement planning. That’s why I’ve created an online workshop to help educate Federal Employees on these critical concepts.
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7 CLASSIC RETIREMENT MISTAKES Federal Employees Make
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