The HSA Strategy Retirees Wish They Started Sooner

For high-net-worth individuals, an HSA can be more than a place to pay today’s medical bills — it can act as a health-care retirement account, offering long-term tax savings and a dedicated pool for future medical costs.

The Triple-Tax Advantage

HSAs offer one of the strongest tax combinations available:

1. Pre-tax contributions from payroll deduction that lower taxable income

2. Tax-free investment growth

3. Tax-free withdrawals for qualified medical expenses — even years later

Grow It Like a Retirement Account

Investing most of the HSA — similar to an IRA or 401(k) — lets balances compound for decades.
Rose Street Advisors encourages keeping a money-market cash buffer inside the HSA, covering an unexpectedly expensive medical year while leaving the rest invested for growth.

Keep Receipts & Reimburse in Retirement

A powerful strategy is to pay out-of-pocket even using a credit card to get the miles/points/cash back.

Store every receipt in a digital vault, and reimburse yourself later in retirement. This keeps more dollars invested and growing tax-free while maintaining flexibility for future withdrawals.

Healthcare Costs Are Higher Than People Think

A healthy 65-year-old couple may need about $388,000 for healthcare costs in retirement under Medicare + Medigap Plan G + Part D (Milliman Retiree Health Cost Index, 2025). This excludes long-term care, making proactive planning essential.

Best Practices

1. Max out annual contributions (use catch-ups if eligible) through payroll deduction.

2. Invest HSA funds for long-term growth.

3. (Optional) Keep a money-market buffer inside the HSA in the event you need to use the funds for a costly medical year.

4. Pay expenses out-of-pocket when possible and even use a credit card that earn points/miles/cash back (and pay it off each month).

5. Store receipts in a digital vault for future tax-free reimbursements.

6. When in retirement, reimburse yourself for the total of your receipts to maximize compounding.

7. Then, treat the HSA as a health-care retirement account paying for medical expenses with pre-tax dollars in retirement.

Used strategically as a part of your overall financial life plan, an HSA becomes a tax-efficient engine for future healthcare expenses — protecting and growing wealth while working and giving retirees flexibility and long-term control.

Jeremy Heavey

AIF ® , NSSA ® | FINANCIAL ADVISOR

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. File #5052118

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Retirement, HSA, and Estate Updates at a Glance

As the calendar turns, the numbers shift — and with them, meaningful opportunities to strengthen retirement plans, optimize taxes, and plan for the next generation. The IRS has released the updated limits for 2026, and while many changes appear modest, they can add up to powerful long-term advantages for savers, investors, and families preparing for wealth transfer.

2025 vs 2026: Key Retirement, HSA, Estate, and Tax-Savvy Updates

Account / Rule	2025 Limit	2026 Limit	Why It Matters
401(k) / 403(b) / 457 employee deferral	$23,500	$24,500	More room for pre-tax or Roth savings.
401(k) Catch-Up (50+)	$7,500	$8,000	Extra boost for those nearing retirement.
Super Catch-Up (60–63)	$11,250	$11,250	Additional employee-only savings opportunity.
Combined Employee + Employer (§415)	$70,000	$72,000	Larger cap helps business owners and self-employed individuals.
Traditional / Roth IRA (under 50)	$7,000	$7,500	Modest increase enhances tax-advantaged growth.
IRA Catch-Up (50+)	$8,000	$8,600	Higher limit for late-career savers.
HSA (Self-Only)	$4,300	$4,400	Helps fund medical + retirement needs.
HSA (Family)	$8,550	$8,750	Slight bump for families.
HSA Catch-Up (55+)	$1,000	$1,000	Still a valuable tool for older savers.
Annual Gift-Tax Exclusion	$19,000	$19,000	Predictable gifting; couples can give $38,000.
Qualified Charitable Distribution	$108,000	$111,000	Tax-efficient giving directly from IRAs.
Charitable Giving for Standard Deduction filers	N/A	$1,000 Single/$2000 Married	Cash donations deductible even without itemizing.
529 → Roth IRA Conversion	Allowed up to $35,000 lifetime	Allowed up to $35,000 lifetime	Turns unused 529 funds into retirement savings.
Estate Tax Exemption (individual)	$13.99mm	$15mm	Higher threshold for tax-free transfers.
Estate Tax Exemption (married)	$27.98mm	$30mm	Expanded room for multi-generational planning.

What These Changes Mean for You

1. More Room For Retirement Savings

Higher limits across 401(k)s, IRAs, and HSAs create more tax-efficient space for long-term wealth building. For example, a saver age 60–63 could potentially contribute up to $35,750 in employee-only 401(k) contributions — and up to $72,000 when combined with employer dollars.

2. Strategic Charitable Giving Options

QCD limits rise to $111,000 in 2026, making it easier for IRA owners 70½+ to give generously while reducing taxable income. Even standard-deduction filers can deduct up to $1000 for single/$2000 for married filing jointly in cash/stock donations next year.

3. New Flexibility for 529 Plans

Unused 529 dollars can now be moved into a Roth IRA for the beneficiary, giving families a tax-efficient way to support a child or grandchild’s retirement — provided the account is old enough and earned-income rules are met.

4. Expanded Estate and Legacy Planning Power

With the 2026 exemption rising to $15 million per individual ($30 million per couple), families have additional room to transfer wealth tax-free. Paired with annual gifting and charitable strategies, this strengthens multi-generational planning.

5. A Holistic Planning Opportunity

Retirement accounts, HSAs, charitable tools, and estate strategies don’t stand alone — they work together. Thoughtful coordination can create more tax efficiency and better long-term outcomes.

Even small annual changes can have major lifetime impact. The 2026 updates offer more ways to save for retirement, strengthen philanthropic plans, manage healthcare expenses, and pass wealth efficiently to heirs. With a coordinated approach, these expanded limits help protect both lifestyle and legacy.

As the financial landscape evolves, staying proactive ensures your planning keeps pace. Use the new 2026 limits to your advantage — and position yourself and your family for a stronger financial future.

Jeremy Heavey

AIF ® , NSSA ® | FINANCIAL ADVISOR

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As 2025 comes to a close, taking a few strategic steps now can help reduce your tax liability and position you for a stronger financial year ahead. Beyond just contributions and deductions, savvy planning can include gifts, income timing, and leveraging credits. Here’s the top 7 ideas for the 2025 year-end.

1. Maximize Retirment Contributions

Contribute to retirement accounts like 401(k)s, IRAs, and HSAs to lower taxable income:

- 401(k): Up to $30,500 (including catch-up contributions for those 50+)

- IRA: Up to $7,000 ($7,500 if 50+)

- HSA: $4,300 for individuals, $8,550 for families

These contributions not only reduce taxes today but also grow tax-deferred (or tax-free for Roth accounts).

2. Utilize Tax-Loss Harvesting

Selling investments that have declined in value can offset capital gains from other investments. This strategy, known as tax-loss harvesting, allows you to reduce taxable income by up to $3,000 in excess losses.

Carryover of Losses:
If your total net capital loss exceeds $3,000 ($1,500 if married filing separately), the remaining loss can be carried over to future tax years. You can apply it against future capital gains, and if any amount remains, up to $3,000 per year can continue to offset ordinary income until the loss is fully used. This allows investors to gradually use larger losses without losing the tax benefit.

3. Accelerate Deductions & Defer Income

- Accelerate Deductions: Prepay medical expenses, property taxes, or charitable contributions this year to reduce taxable income (if you are itemizing on your taxes).

- Defer Income: Delay bonuses, consulting income, or other earnings to next year if you expect a lower tax bracket.

4. Review Tax Withholding

Check your paycheck or estimated tax payments to ensure you're not overpaying or underpaying. Adjusting whitholding before year-end can prevent surprises come April.

5. Take Advantage of Tax Credits

Maximize credits like the Child Tax Credit, Earned Income Tax Credit, or education-related credits. These directly reduce your tax bill rather than just your taxable income.

6. Leverage the Gift Tax Exclusion

Consider using the annual gift tax exclusion ($18,000 per recipient in 2025) to shift wealth to family members without incurring gift taxes. Gifts can reduce the size of your taxable estate while helping loved ones financially.

Example: Did you know that a married couple can give a married child and their spouse $72,000 in total?

Mom gives daughter $18,000
Dad gives daughter $18,000
Mom gives son-in-law $18,000
Dad gives son-in-law $18,000

By splitting gifts this way, the couple fully uses the annual exclusion for each recipient without triggering gift taxes.

7. Make Qualified Charitable Distributions (QCDs)

If you are 70½ or older, consider using a Qualified Charitable Distribution from your IRA. QCDs allow you to donate up to $108,000 directly to a qualified charity in 2025, counting toward your required minimum distribution (RMD) while excluding the donation from taxable income. This strategy can lower your adjusted gross income and potentially reduce Medicare premiums or tax on Social Security benefits

Year-end tax planning is about more than just checking boxes—it’s an opportunity to optimize savings, leverage credits, and strategically position your finances for the coming year. A review with a tax professional can ensure these strategies fit your situation and maximize your benefits. taxable income. This strategy can lower your adjusted gross income and potentially reduce Medicare premiums or tax on Social Security benefits.

This material and the opinions voiced are for general information only and are not intended to provide speciﬁc advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Rose Street Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed. The tax and legal references attached herein are provided with the understanding that neither M Financial Group, nor its Member Firms are engaged in rendering tax, legal, or actuarial services. If tax, legal, or actuarial advice is required, you should consult your accountant, attorney, or actuary. Neither M Financial Group, nor its Member Firms should replace those advisors.

Jeremy Heavey

AIF ® , NSSA ® | FINANCIAL ADVISOR

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In the spring of 2008, my wife and I spent several days trekking through Peru’s Andes Mountains on our way to Machu Picchu. The climbs were steep, the air thin, and the scenery breathtaking. But what we remember most is the team of sherpas who turned a demanding expedition into an unforgettable journey—while staying completely out of the spotlight.

From the first morning, the sherpas set the pace and prepared us for each leg of the climb. They balanced heavy packs on donkeys, cooked full meals at 10–15,000 feet, and somehow managed to bake a surprise birthday cake for my wife halfway through the trip. Their skill with the tools of the trade—sturdy ropes, perfectly packed gear, and altitude-tested cooking equipment—kept us comfortable and safe while we focused on the views and the experience.

At every scenic overlook, they urged us to pause, breathe, and take in the beauty. Yet when it came time for photos at the summit, the sherpas quietly stepped behind the camera. They were happiest as the experts behind the scenes, making the journey possible while letting us enjoy the moment.

That trek mirrors how our wealth-management team serves clients. We realize how hard you have worked so hard to get to the point you have and why you are now seeking professional guidance. We begin by understanding your goals and mapping the route. We then take over and carry the load through this next lag of the journey—investment research, tax strategy, regularly trading to take advantage of the trends, keeping your portfolio wisely diversified, estate planning—and we bring the right tools and partnerships so you can focus on life’s vistas. When markets shift or unexpected challenges arise, we adjust the path and keep you moving toward your destination.

Just as our sherpas found joy in seeing us reach the amazing view at the end, we find fulfillment in helping clients achieve their financial summits. The amazing view you have of seeing your kids and grandkids enjoy experiences you have worked so hard for and the celebrations are yours; we’re the steady, experienced guides working quietly in the background to make the climb safe, rewarding, and memorable.

Jeremy Heavey

AIF ® , NSSA ® | FINANCIAL ADVISOR

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The Pre-Flight Checklist: Double Check Your Beneficiaries

When we flew in Jim’s Cessna 170, we had no idea it would be the last time. For years, my son has shared his dream of becoming a pilot. Spending time with Jim and flying in his plane is a memory we will never forget. Jim was a passionate aviator and generously shared his love of flying with my son. Shortly after this flight, Jim was diagnosed with a terminal illness and passed away months later.

While we don’t often think about it, none of us know when our last flight will be. Just as pilots follow a strict pre-flight checklist before takeoff, there are important steps we encourage our clients to take to ensure their assets support the people and causes they care about most.

1. Verify Your Current Beneficiaries

Just as a pilot confirms fuel levels before takeoff, check that listed beneficiaries on your investment accounts are accurate. Life changes such as marriage, divorce, births, or deaths may require updates to reflect your current wishes.

2. Confirm Accuracy of Information

A pilot checks all instruments before takeoff to avoid errors. Likewise, ensure that the names, contact details and Social Security numbers of your beneficiaries and are correct to prevent complications later.

3. Align Your Legacy with Your Passion

Before takeoff, a pilot sets their course. Consider whether your beneficiaries reflect your values and interests. Naming a non-profit organization that aligns with your passion will continue inspiring future generations and further your legacy.

Just as Jim's legacy lives on through his passion for aviation and the memories he created, we have the opportunity to leave our own legacy. Taking the time to review and update your beneficiaries ensures that your hard-earned assets are directed to the people and causes that matter most. It’s a simple yet powerful way to safeguard what’s important to you. Remember, life is unpredictable, and while we will never know last flight takes place, we can ensure our financial legacy is ready to take off when the time comes.

7642154.1This material and the opinions voiced are for general information only and are not intended to provide speciﬁc advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Rose Street Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed. The tax and legal references attached herein are provided with the understanding that neither M Financial Group, nor its Member Firms are engaged in rendering tax, legal, or actuarial services. If tax, legal, or actuarial advice is required, you should consult your accountant, attorney, or actuary. Neither M Financial Group, nor its Member Firms should replace those advisors.

Jeremy Heavey

AIF ® , NSSA ® | FINANCIAL ADVISOR

Jeremy is passionate about partnering with individuals and families to identify what is important in their lives and creating a comprehensive financial strategy to help them reach their life goals. This holistic approach allows Jeremy and the wealth management team to ensure the specific needs of the client are front and center as they make investment recommendations and collaboratively design custom-tailored financial plans.

Jeremy has a professional track record starting, leading, and managing for-profit and non-profit organizations. He is a graduate of Taylor University and has completed business programs at both Hong Kong Baptist University & Harvard Business School. Jeremy is also formally trained and certified in behavioral assessment, conflict management and life coaching. Jeremy, his wife Kim and their 4 kids reside in Kalamazoo. They love spending time exploring the outdoors, fixing up their farmhouse, and living life with friends and extended family.

Fun fact: Jeremy has been playing drums since he was 13 years old and made callbacks for the Blue Man Group.

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