Surveys show rising health care costs affect retirement savings—HSAs are a solution

first_imgLike many Americans, Gavin Smith’s employer is offering only a high deductible health plan (HDHP) next year. Having two active sons and knowing the HDHP has higher out-of-pocket amounts, he is worried about having enough money to pay the medical bills. Gavin decides to reduce the amount he saves for retirement to help free up more money for health care costs.A recent survey by Employee Benefits Research Institute (EBRI)/Greenwald & Associates shows that Gavin is not the only worker making a choice like this. Some workers are sacrificing their retirement security to meet their potential medical expense obligations. Unfortunately, this only shifts the financial burden from health care to retirement readiness.While HDHP enrollment continues to grow, some workers and employers may not realize how health savings accounts—a component of HDHPs—can reduce their financial concern. Workers save money using tax-free HSA distributions for qualified medical expenses. And similar to retirement plans, many employers help fund their workers’ HSAs to encourage HDHP enrollment, which is a cost savings for employers and workers alike.Worker DissatisfactionThe Employee Benefits Research Institute (EBRI)/Greenwald & Associates recently released the 2016 Health and Voluntary Workplace Benefits Survey (WBS), which shows that some workers are sacrificing their retirement security in response to rising health care costs. The survey included 1,500 workers between ages 21–64. The results show, among other things, that some workers are reducing their retirement plan contributions, taking loans and withdrawals from their retirement savings, or delaying retirement.28 percent of workers who reported an increase in health plan costs decreased their retirement plan contributions, and 48 percent have decreased their contributions to other savings.12 percent took a loan or withdrawal from their retirement plan. 30 percent have delayed retirement as a result of rising health care costs.Another survey, the 2017 Workplace Benefits Report by Bank of America Merrill Lynch, also indicates that health care costs negatively affect financial wellness. This survey included a national sampling of 1,242 employees across the U.S. whose employers offer 401(k) plans. Survey results show that 79 percent experienced an increase in health care costs in 2016 (up from 69 percent in 2015). Among those experiencing an increase, 56 percent are spending less or contributing less to their financial goals and about 62 percent are saving less for retirement. HSAs GrowingAlthough the cost of health care seems to be having a negative impact on saving for retirement, it is shedding light on a possible solution—saving with an HSA. The number of HSAs and the amount of HSA contributions are at all-time highs, and are a clear reflection of growing enrollment in HDHPs. And expectations are that this trend will continue if employers continue moving to HDHPs. Devenir, a national leader of customized investment solutions for HSAs and the consumer-directed healthcare market, conducts annual HSA market surveys of the top 100 HSA providers. Devenir’s 2016 Year-End HSA Market Statistics and Trends report shows that the number of HSAs exceeded 20 million at year-end 2016 (a 22 percent increase over 2015), holding almost $37 billion in assets (a 20 percent increase). Of a total $25.5 billion HSA contributions made in 2016,26 percent came from employer contributions ($868 average employer contribution), 46 percent from employees ($1,786 average employee contribution), and19 percent from individual contributions not associated with an employer ($1,713 average individual contribution).The survey also shows that health plan partnerships are the largest driver of new account growth in 2016. Health plan referrals account for 37 percent of new accounts opened. Direct employer relationships accounted for 32 percent of new accounts.The remaining drivers are insurance agent referrals (10 percent), administrator/TPA referrals (9 percent), and individuals (5 percent).While HSA assets are withdrawn every year to cover medical costs, the amount that is retained in HSAs continues to grow every year. When looking at contribution and withdrawal activity, Devenir estimates that 22 percent ($5.7 billion) of HSAs assets were retained at year-end 2016. HSA SolutionMore Americans are moving to HDHPs—by choice or as driven by their employers—and the number of HSAs continues to rise. Employers and individuals should understand the benefits of HSAs. Individuals can pay for current medical expenses or save for future expenses with an HSA—there is no use it or lose it rule. Contributions reduce taxable income. Earnings on the account build tax free. Distributions are tax-free if properly used for qualified medical expenses. Individuals who save on medical expenses may have more money in their budget to focus on other savings needs. Educating employers and individuals about the tax benefits of an HSA will not only encourage HDHP/HSA participation, but can free up funds for IRA and retirement plan contributions. 26SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Christle Johnson Christle Johnson has worked at Ascensus since 2001 as a consultant and an editor. Her work includes researching, writing, and editing a variety of topics on IRAs, HSAs, and employer-sponsored … Web: https://www2.ascensus.com Detailslast_img read more

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Revised IORP Directive could be ‘impossible’ to pass, MEP warns

first_imgThe revised IORP Directive could remain “impossible” as European Union member states continue their opposition to Brussels being granted the requisite competences, the MEP charged with scrutinising European pensions legislation has said.However, Thomas Händel, elected this week as chairman of the European Parliament’s Employment and Social Affairs Committee (EMPL), said it was still important for him and his four committee colleagues to continue the push for a more integrated employment market, including a focus on pension matters.The MEP, a member of Die Linke – the left-leaning opposition party to Germany’s governing grand coalition – told IPE the “main question” for EMPL in the coming years would be how to address issues of social equality by addressing workers rights.Asked about the passage of the revised IORP Directive, published by internal markets commissioner Michel Barnier in March, he said he believed it would “remain impossible” so long as any of the 28 member states “oppose and deny any EU competences”. “In addition, the very different systems might be impossible to equalise,” he said.Händel said he was uncertain whether any elements of the former Portability Directive, revived last year after Barnier dropped more stringent capital requirements from the revised IORP Directive, would once again be discussed.“Concerning certain elements of the Portability Directive,” Händel said, “we have to wait for the first exchange of views between the political groups here in the Parliament.“But the increase of eurosceptics and the anti-EU movement will not make it easier to discuss the free movement of workers, and therefore pensions as well.”The Portability Directive was eventually passed by Parliament in April as a directive on supplementary pensions rights.It introduced universal vesting periods for benefit accrual but backed away from 2005’s initial suggestion that rights should be transferable when a worker moves to a new employer.Händel, now in his second term as an MEP, said he hoped a parliamentary majority could be found to “ensure the promise” made by the EU decades ago to create an environment where employees were free to work and live wherever they chose.“That necessarily means everyone should have the right to take pension credits with him, wherever he chooses to live,” he said.His comments come after the newly elected deputy chairman of the Economic and Monetary Affairs Committee (ECON) – in charge of tax affairs, as well as scrutiny of proposals to allow the European Insurance and Occupational Pensions Authority to raise a direct levy to fund itself – said the pensions industry should not cry foul, as it had never been hit.last_img read more

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Melodie Jane Keith

first_imgMelodie Jane Keith, 61, of Greendale, Indiana, passed away Monday August 13, 2018 in Greendale, Indiana.She was born April 18, 1957 in Milan, IN, daughter of the late Gerald and Marilyn (Tibbs) Lutherbeck.Melodie worked as a Laborer for Campbell Hausfeld, with over 10 years of service.She was a member of the New Life Southern Baptist Church. Melodie taught aerobic classes for several years, she loved Christian music and southern gospel music. Melodie collected angels, but her greatest joy was her family.Melodie is survived by her loving spouse of 43 years Robert Keith, son, Brandon Keith of Danberry, CT; siblings, Jerry Lutherbeck of Aurora, IN, Susie (Joe) Halcomb of Versailles, IN, Tammy (Danny) Brookbank of North Vernon, IN, Ricky Lutherbeck of Lawrenceburg, IN, Wendy (Mike) Goodpaster of Lawrenceburg, IN; grandchildren, Kyle & Adriana Keith.She was preceded in death by her parents, and a brother, Randy Lutherbeck.A memorial service was held on Saturday, August 18, 2018 at the New Life Southeran Baptist Church, 19936 Schaeffer Rd., Sunman, Indiana at 6:30 pm with Brother Dwayne Barrows officiating.Contributions may be made to the New Life Southern Baptist Church. If unable to attend services, please call the funeral home office at (812) 926-1450 and we will notify the family of your donation with a card.Visit: www.rullmans.comlast_img read more

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Clare’s Brendan Buglar hit with two match ban

first_imgBuglar appealed his sending off but the central Hearings Committee found that evidence provided was not sufficiently compelling to rebut the referee’s report.  The statement goes on to say “As this represented a repeat Infraction, the Committee imposed a two match suspension in the same code and at the same level”.Clare are away to Kilkenny on Sunday knowing a win could potentially see them into the quarter finals but a defeat will condemn them to a relegation play off against the Cats. Clare can still secure their Division IA status this weekend.Davy Fitzgerald’s side must beat Kilkenny and hope Galway beat Dublin. If those two results unfold, it will be Dublin versus Kilkenny in the relegation play-off.last_img

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Glo Salutes Dominant Under-23, Praises Eaglets

first_imgNigeria’s Under-23 national team, ‘Dream Team VI,’ has been commended for qualifying for the quarter finals of Men’s Football Tournament in the on-going 2016 Olympics in Rio de Janeiro, Brazil.Africa’s biggest corporate supporter of football, Globacom, in a press statement in Lagos yesterday commended the fighting spirit and doggedness of the players which saw them defeat Japan 5-4  and  also pick maximum points with a 1-0 victory over Sweden in the first and second matches of Group B . “The Dream Team has, so far, been outstanding in the tournament. We urge them to sustain the momentum during the last Group B match against Colombia on Wednesday so as to top the group and remain in the commanding position,” Globacom said.The company praised the team for making Nigeria and Africa proud and said it looks forward to seeing them progress to the final and ultimately winning the gold medal. This will make them equal the record of the first Dream Team which won the football gold at the 1996 Olympic Games in Atlanta, USA.The Globacom also praised the Under-17 national team, Golden Eaglets, on their victory over Junior Menas of Niger Republic.Eaglets defeated Niger by a lone goal in Abuja on Saturday in the final qualifying match for African U-17 Championship. The two teams will meet in the second leg encounter in Niamey in a fortnight.Globacom urge the technical crew of the team to remain focused as they intensify efforts to qualify for the next championship, adding that “The team should work assiduously toward victory in Niger,”“We appreciate the support given to both teams by Nigerians and the Nigeria Football Federation in particular.  We enjoin all to continue to support the teams until the ultimate victory is achieved,” Globacom concluded. Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more

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