\u201cFor some people, that could be a saving grace,\u201d Shafransky says.\u00a0<\/p>\n
To qualify for an HSA in 2025, your health insurance plan must have an annual deductible of at least $1,650 for individual coverage or $3,300 for family coverage. In 2025, workers enrolled in such a plan can contribute up to $4,300 for self-only coverage or $8,550 for family coverage, plus catch-up contributions of $1,000 if you\u2019re 55 or older. \ufeff\ufeff\ufeff<\/p>\n
4. Plan for taxes<\/p>\n
If you\u2019ve managed to stash a significant amount of savings into a traditional 401(k), it\u2019s important to understand that all of that money \u2014 along with any money you\u2019ve invested in a traditional IRA \u2014 will be taxed at your ordinary income rate when you take withdrawals.<\/p>\n
And once you turn 73, you must take required minimum distributions<\/a> (RMDs) from those accounts, whether you need the money or not, says Christopher Haigh, a certified financial planner and founder of Iconoclastic Capital Management in Brooklyn, New York. \u201cSome people get bumped up to a higher tax bracket<\/a> because of RMDs,\u201d he says.<\/p>\n To avoid that, you may want to divert a portion of your contributions to a Roth 401(k)<\/a> if your employer offers one. Contributions to a Roth 401(k) aren\u2019t tax-deductible, but withdrawals are tax-free as long as you\u2019re at least 59\u00bd and have owned the account for at least five years. And Roth accounts are not subject to RMDs.<\/p>\n Haigh suggests investing some of your savings in a taxable brokerage account. These accounts aren\u2019t subject to RMDs, and the money in them can be tapped at any time without triggering the 10 percent early-withdrawal penalty the IRS typically charges for retirement account withdrawals before age \ufeff59\u00bd. \u201cThat flexibility is really helpful\u201d if you retire early, Haigh says.<\/p>\n 5. Pay down debt<\/p>\n High-inter\ufeffest debt, such as credit card debt<\/a>, can be a major drag on your retirement income. If you\u2019re paying 26.99 percent interest on a credit card balance but only earning an investment return of 7 percent, \u201cyou\u2019re effectively 19.99 percent worse off by saving into your investment account than you are paying off the debt,\u201d Shafransky says.<\/p>\n However, not all debts are alike. If you locked in a 30-year, fixed-rate mortgage when rates were 3 percent or lower, you\u2019ll probably come out ahead by investing money instead of paying off your mortgage early<\/a>, Shafransky says.<\/p>\n 6. Plan for long-term care<\/p>\n Even if you\u2019re in excellent health, there\u2019s a good chance you\u2019ll need long-term care sometime in the future. The U.S. Department of Health and Human Services estimates that nearly 70 percent of 65-year-olds will need some kind of long-term care in their lives, and around 1 in 5 will develop a disability serious enough to require long-term care for more than five years. \ufeff\ufeff<\/p>\n Even a few months in a long-term care facility can decimate your nest egg. The median annual cost of a semiprivate room in a nursing home was more than $111,000 in 2024, according to insurance provider Genworth\u2019s annual Cost of Care Survey<\/a>.<\/p>\n