PLANSPONSOR - April/May 2019 - 5

HSAs Shine Brightly
In the Retirement Savings Universe
In the universe of retirement
options, there are a lot of bright
stars-401(k)s (and their nonprofit
and public-sector counterparts,
403(b) and 457 plans), IRAs, and
Roth 401(k)s and IRAs. And while
each of these retirement savings
options offers its own distinct
advantages, shining brightest
among them in the retirement
stratosphere is the oftenoverlooked
HSA (health savings
account).
What's so great about an HSA?
Think, flexibility. HSAs are the
heavyweights of tax-advantaged*
accounts, enabling account
holders to nimbly balance their
need for immediate access to
funds for qualified health expenses
with long-term savings goals.
They also effortlessly lift heavy
tax burdens with tax-free contributions,
interest and investment
earnings. Even withdrawals for
qualified expenses are tax-free!*
Savings Is My Middle Name
With savings built right into the health savings account's name, it's no wonder HSAs are
strong components of the retirement planning constellation. But with so many different
retirement account options, it's easy to overlook the long-term potential of HSAs.
Many account holders still use them as if they were flexible spending accounts that
have to be used each year to avoid forfeiture of funds-a common misconception cured
by ongoing education.
Different But Alike
One thing that's common among all retirement saving choices is the opportunity to
invest for additional growth potential. And it's common knowledge you can invest in a
401(k), IRA and similar plans, it's not widely known that you can also invest in an HSA
(with tax free investment earnings).
After meeting the minimum balance requirements (usually $1,000), HSA account
holders can invest funds, that exceed the required balance, into the HSA custodian's
available options. Most custodians offer a variety of investment options. And similar
to a 401(k) plan, account holders can invest as little or as much as they want and can
pause or change their investments any time. Unlike other retirement options, invested
assets are available for withdrawal before retirement for eligible health care expenses,
without penalty or taxes.
One thing to keep in mind is that, although the money in the cash portion of the HSA
is interest bearing and protected by the FDIC, HSA funds that are invested are not
guaranteed and could lose value, like a 401(k), IRA and other retirement vehicles.
Financial advisors play a pivotal role in counseling clients about if, when, how and how
much money to invest-and developing an appropriate HSA investment mix that's
aligned with their other retirement accounts and overall financial goals.
Because One Size Won't Fit All
About UMB
UMB has developed an HSA solution
that's flexible enough to work for
different recordkeepers and financial
advisors. We offer everything from
a turnkey, out-of-the-box solution with
UMB's exclusive investment platform-
UMB HSA Saver®1-featuring handselected,
diversified mutual fund lineup,
to customized, modular solutions that
can be fully integrated into your branded
portal, featuring your investment mix.
These days, the workforce includes five generations. And all this diversity makes it
unlikely that one retirement solution will work for everyone. Yet, even with all the
options available, more choice doesn't always lead to better outcomes-especially
when not everyone has the same options or even understands those they have.
The retirement accounts people are likely to have or choose will depend on their
employment status, medical plan participation, career phase, and personal financial
circumstances and goals.
Here too, financial advisors can play a key role in both helping people understand the
retirement options available to them and in maximizing the potential of each.
* States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own;
some states tax HSA contributions. If you have questions about your tax implications, consult your
tax advisor. Withdrawals for nonqualified medical expenses are subject to income taxes and a
possible 20% penalty, if you're under age 65.
1
UMB Investment Management selects mutual funds in various asset classes for inclusion in the
UMB HSA Saver Investment Program. UMB Investment Management is a department of UMB
Bank, n.a. UMB Bank, n.a. is a wholly owned subsidiary of UMB Financial Corporation.
Investments in securities through HSA investment account are:
Not FDIC Insured * May Lose Value * No Bank Guarantee
SPONSORED SECTION

PLANSPONSOR - April/May 2019

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