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Health Savings Account Plan Reviews Question & Answers

2013 December 30
by Sarah Fields

Lisa asks…

62years old, family income: $50k/y, and saving: $125k. Buy a family home? How to plan my retirement?

I have been living in the USA for about 9 years in a family of 5. I am 62 years old, but do not have a family home. My family income is $50k/year, but I only have $125k in my saving for all.

Do I have to buy a home for my family?
Do I have to pay my children’s colleges?
Do I have to not spend it?
What should be the best choice?

I need a professional advice. Please help.

Sarah Fields answers:

Need more information: “Family income is $50k/yr.”, I’m assuming that there is only one wage earner in the family (you), and that you have been working ever since you have been in the US, 9 years. Under the current Social Security provisions, you would have to work another year (10 years) to earn the required 40 credits (1 per quarter of work; 4/yr) to become eligible for Social Security benefits.

I assume that you are currently renting/leasing a home. I also assume that your family consists of yourself and spouse and 3 children. In that case you would need a 3 bedroom house. Depending on where you live (City), you would spend a good portion of your savings for the down payment. So, in my opinion, buying a house is not realistic.

As to the “children’s college”, again I am assuming that they are at, or near, college age, and have average, but not exceptional grades. With that scenario, look at “Junior or Community” colleges where the level of education is relatively equal to the State Colleges, but at a lesser cost. Another advantage is that there is no on-campus housing, so the student can live at home, saving the expenses of room and board. In most States a student earning a certificated from these institutions can transfer into a State institution as a Junior (if all of the credits are accepted) and receive a diploma from that school as well.

Also, the student can explore any educational assistance programs offered by the school, the State, or the Federal Government, (the Pell Grant comes to mind). The student should discuss his/her financial situation with the high school counseller, or the college financial advisor.

Another path to a good careeer/job are technical schools which teach skilled trades, such as Electrical, Drafting Mechanic, Welding, Over the Road driving, etc. These schools are economical and a certificate can be earned in two years or less.

The choice of higher education depends on the person and his/her goals for the future.

So to your decision as to what to do with the money you have saved. Again, I am assuming that Social Security will be your only retirement income. Having said that, I would look to put some money into stocks/ bonds or other financial instruments that are earning more than you are now (assuming you have it in a bank account or bank Certificates of Deposits (CD’s). I would recommend that you talk with representatives of some brokerage firms – Chales Scwab, Merrill Lynch, Dean Witter, and the like – with low/no per transaction fees and expenses, to discuss your future financial needs in relation to your current economic situation.

Overall, I don’t see you retireing ion the near future. Depending on your health and the type of work that you do, I see at least another 5-7 years of employment, with a significant increase in savings and a decrease in spending, where possible.

While you did not mention an employer pension plan, I am assuming, for your sake, that there is a defined benefit plan – so much retirement income per month based on years of service – or a “401(k)” plan to which you contribute some part of your earnings and the Company, may/maynot make a contribution. (If such a plan exists, and the Company matches the employees contribution up to a certain limit, I would recommend that you contribute to the level of the Company’s contribution. (Co=6% up to $750, or Co = $400 flat yearly match; Empl.= .015% of salary, or $750; Empl.= $400 yearly contribution).

Remember, that 401(k) contributions are “tax-free” until distributed, usually at retirement, and will affect Social Security benefits since they are not considered to be “reportable income”.

Only you can make the decision as to the “Best choice”, after reviewing all your options/ needs/ other considerations (health needs, etc.), I have offered a small portion, the rest is up to you. Good luck.

Thomas asks…

Pet owners, do you not have pet insurance in America?

I just saw an answer to a question, where someone said ‘I wish there were cat insurance’ (regarding medical bills). Do you guys over there not have pet insurance at all? This has surprised me, because pet insurance is available to us in the UK! :)

Can anyone clear this up for me?

Sarah Fields answers:

Yes. We DO have pet insurance, and I’ve researched it several times over the years. I was unable to find an appropriate plan, with a legitimate company. So many of the plans exclude anything that is common to specific breeds – most do not cover genetic defaults. Some included wellness coverage that reimbursed for normal annual visits, and seemed to be a great deal…at first glance it looked like the annual premium was less than the cost of that annual visit, and that looked really attractive, but after reading reviews by actual customers I was disappointed.

And then, last year while fostering a stray Shar Pei and searching for her owners, I found a Shar Pei forum. During my postings with them, the subject of pet insurance came up, and they were raving about a “great” company called Vsurance aka Purrfect Pet Insurance. So I checked it out. What I found was that the company didn’t exist anymore. These folks were paying premiums to a company that had fallen apart months earlier, while members were still waiting patiently to be reimbursed for vet bills that should have been covered.

I initially found a legitimate trade article about the company, and along with it’s websites, appeared to be ok, but it wasn’t.

Http://www.medicalnewstoday.com/articles/87137.php

The company had several addresses in CA and Nevada, but didn’t actually exist at any of those locations. Since payments were all sent to a PO box, the exact location was unclear. But I found it. The owner, Russell Smith, was operating it out of his basement in Michigan or Wisconsin. And he had no money. It was all a big scam. He had found a loophole – insurance is unregulated in Nevada.

Worse yet, he was operating under at least 6 different company names – all of them with professional appearing websites. One tip off was the copyright at the bottom of the web pages. None of them had been updated since 2007.

I reported him to several agencies, the FCC, the BBB (in 4 states), etc. They had his Vsurance site shut down, but some of the others still exist.

So after reading this question, I checked on this again, and found that he was up to his old tricks again under a new name: Ensurapet, in a new state, Arkansas, which was shut down by the trade commission in that state in June of this year. I’m surprised this guy isn’t in jail. But the pet insurance industry seems to lack the same regulation and protections of human health insurance.

Http://www.securities.arkansas.gov/!userfiles/S-08-075.pdf

Considering how many companies I have found that are linked to this one scammer, it’s given me a bit of a bad attitude towards pet insurance.

I believe that there are legitimate pet insurance companies in the US, but now I find it hard to trust any of them. My best advice to anyone is to thoroughly research the company, the owners…everything. Dig deep. Make sure it’s completely regulated, and has been operating for years…not months. Check their stocks, and the BBB. Make sure they have a legitimate business address and current published phone numbers. If it’s a website, make sure the copyright is current. And cross check any other sub companies that are referenced. If any of them are connected to Russell Smith….report him to authorities. It’s a scam.

As a result, I find it difficult to trust any of the companies and have chosen to put money that would have been used for premiums into a savings account instead. At least I know that it will be there when I need it.

Ken asks…

Has anyone’s political view regarding the Health Care Bill changed? Or are we just bickering at each other?

If so, what about the arguement made you change your mind?

Sarah Fields answers:

President Obama fully supported the HR 3200 bill dated July 14,2009.
He was telling American citizens that we were in the midst of a “health care crisis” and he wanted the House of Representatives and Senate to pass that version of the bill so he could sign it into law before the August recess.

There is no bill yet?????? That is yet another lie perpetuated by the left because there was so much outrage over what was contained in the original bill that was presented to the House. The only reason that version is now referred to as “one of the many drafts floating around” is because the original bill was a monstrosity on so many levels.

If you don’t believe me, here is the bill.

Docs.house.gov/edlabor/AAHCA-BillText-071409.pdf

Unlike everybody who comments on this absurd bill from an idealistic perspective, I have read and analyzed the entire bill. All the criticism you hear about the bill is almost entirely true.

1) The insurance exchange is a blatant attempt at a government takeover of the healthcare industry. The bill is a clear attempt to force everyone into a single-payer system.

2) In the event of a shortage in healthcare, care would be severely rationed. (A shortage is inevitable when you increase the supply side of the equation with 47 million new patients).

3) Almost all savings obtained from the bill are through cuts to Medicare. This is done through a back-door approach by cutting Medicare reimbursements to doctors and hospitals. This means that care will be rationed away from the elderly.

4) All illegal immigrants would be covered as well. The 47 million uninsured figure that is being thrown around includes 12-13 million illegal immigrants.

5) The bill does not exclude federally funded abortions. The Catholic community is extremely pissed off about this.

6) The “death panels” was an exaggerated term used by Sarah Palin. However, the underlying concept is accurate. We would have a bureaucratic organization that ultimately determines the scope and extent of all health care.

7) The Federal Government would ultimately take away the right to keep your doctor.

8) Small businesses would be forced into the government plan as a cost-cutting measure. The penalty levied on these small businesses for not complying would devastate small businesses. By the way, small businesses account for approximately 70% of all jobs in the U.S.

9) The Federal Government determines the value of a doctor’s time, mental stress, and professional judgment. The Federal Government has the right to adjust doctors’ pay as it sees fit.

10) The Government cannot be sued for price fixing. There is no “judicial review” against Government monopoly.

I could go on all day. This whole idea is poorly thought out and would be a bureaucratic nightmare. Our current administration absolutely wants to transition to a single-payer system. The left is full of sh*t. Furthermore, it is virtually impossible to change back from a single-payer system. Single-payer systems work on the lone premise of RATIONING CARE. You cannot give everybody the right to health care and then take it away.

A few notes:

1) President Obama desperately wants the endorsement of AARP. There is dissent within AARP over this bill. That is why they publicly stated that they have not endorsed any particular version of this bill. Many elderly citizens have already defected from AARP over this.

2) President Obama and liberals have crucified the insurance industry. You do know that AARP sells insurance to the elderly, right? Sounds hypocritical, huh?

3) The AMA is largely a bureaucratic organization headquartered in Chicago. It does not represent the majority of physicians in the United States. In fact, it only accounts for 29% of physicians. Many in the AMA do not even practice medicine and are not career physicians. This is a special interest group. Even so, there is still dissent within the AMA

4) Howard Dean is a big proponent of a single-payer system. He masquerades as a practicing physician. This man is a fraud. He joined the Vermont State Senate the year after he graduated from medical school. He practiced medicine PART-TIME at his wife’s practice for 10 years. He is not a career physician. He has never practiced full-time medicine. He knows absolutely nothing about our current healthcare system and managed care. Real physicians despise this man.

This bill needs to be scrapped. Let me know if you want to know more. I am an independent, not a Republican or a Democrat. I care about the future of this country and our economy. I have no ties to political special interest groups. Politicians are scumbags…and this proposed healthcare reform is nothing but a push for GOVERNMENT TAKEOVER!! Stop trusting the Federal Government and these ridiculous politicians

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