Integrating Physical Health And Financial Health
Adrian B Early, Ph.D., MBA, CFP®
Chief Investment Officer, shareGRO™ Practice
Health is like money. We never have a true idea of its value until we lose it.
– Josh Billings
A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.
– Suze Orman
The greatest wealth is health.
One key reason for building wealth is to meet unexpected needs, healthcare being a prime example. Wealthy people may have health insurance, but many, apply their wealth when needed to anything they care deeply about like health. This topic spans both wealth building and wealth protection.
A wonderful means for especially healthy (including young) people, is the Health Savings Account (HSA) paired with a high-deductible health insurance plan, and perhaps a health sharing network, all of which we will now discuss. The HSA is tax deferred, building a store of value without tax burden along the way, flexibly usable for health costs as they arise, and (anything left) in retirement like another IRA account. There is no need to spend the HSA on health costs, these can be paid from the taxable account, and doing so leaves more retirement money for later. It is another way to build tax-deferred funds. Besides, not paying from the HSA for health expenses avoids needing to waste your time, CPA, and taxpayer money accounting for whether your expense was within guidelines of allowed healthcare expenses.
The HSA works with a high deductible health insurance plan. We know raising deductibles helps reduce the premium or cost of insurance, another key benefit. And, though the HSA account builds, having a large taxable account can supply such healthcare needs, saving the tax deferred HSA itself to grow for retirement later. The taxable account is perhaps used as an income replacement working endowment as described in the taxable account article. The goal is multiple accounts with flexible possible uses, and optimized tax treatment consistent with that flexibility.
Additionally, the huge conflict of interest with insurance firms can be jettisoned by participating in a Health Sharing network, where individuals pay their monthly health budget either directly, or through the sharing network to others in the network. This is administered by the sponsor of the health sharing network system. Any negotiations with health care providers have aligned interests with participants, a seeking of reduced cost only, not denying service as is a key motivation of insurance claims adjustment.
Having the right financial system in place can be freeing to enjoy and live life, getting care when needed. May your life be simple, enjoyable, and free from major worries and hassles. Go forth and bring joy to others, that it may liberate joy in you and your loved ones.
© 2017 shareGRO™ Practice