Your health and wealth are intrinsically linked. Health insurance isn’t just for peace of mind; it's a financial shield protecting your assets from life’s unforeseen blows. It is your security.

What to Know:

Stay Under Your Parents: Leverage this provision. Until 26, you can remain under your parent's health plan regardless of marital status, education, or residence.

Emergency vs. Urgent Care: Know the difference. Emergencies are life-threatening, while urgent care handles severe but non-life-threatening issues. Using urgent care over an ER when appropriate can save costs.

Preventive Measures: Take advantage of free annual check-ups and screenings. Early detection can mitigate severe health issues and reduce future costs.

Telehealth Perks: Many plans now offer telehealth services. They're not only cost-effective but also save you time.

Networks Matter: Stay in-network. Services can cost more out-of-network. Always verify a provider's network status before an appointment.

Transitioning: As 26 approaches, you’ll transition from the parental nest (insurance-wise). Whether it's a plan from your employer or the marketplace, researching beforehand is pivotal.  
- Consider: Employer-Sponsored Plans: If offered, assess the health plans provided by your employer. These can often be more cost-effective than private plans. Also, consider the nuances of options like High Deductible Health Plans (HDHP), which can be paired with Health Savings Accounts (HSAs) and FSAs.  These are covered in the next section.

Seek HR's Guidance: If you're navigating employer-sponsored health plans, your HR department can clarify intricacies, ensuring you understand the benefits and potential drawbacks of each option.

Knowledge is Power: It's not just about having insurance; it's about using it wisely. Make it a routine to claim any out-of-pocket expenses. Remember, every dollar counts.
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Questions To Consider:
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1. Do you truly understand the benefits and limitations of your current health insurance?
2. How prepared are you for the transition once you turn 26?
3. Are there health services you’re paying for that could be reimbursed?
4. Have you researched your employee Health Benefits?

Next Steps:‍

- Thoroughly review your health insurance. Understand what it covers, and note any key dates or check-ups.
- Approaching 26? Don't wait till the last moment. Start your research on your next health insurance plan now.
- Research Employee Health Insurance Plans

Completed:‍

- Understood and maximized the benefits of my health insurance.
- Prepared a transition plan for post-26 health coverage.

An HSA is a tax-advantaged account for those with high-deductible health plans (HDHPs). It’s your fund for medical expenses that your plan doesn't cover. Setting aside some of your money here can make sense for the future.

What to Know:

Tax Benefits: Your contributions to an HSA are tax-deductible. The growth inside? Tax-free. And when you take money out for qualified medical expenses? That's tax-free, too.

No Yearly Pressure: If you don't use all your HSA funds this year, they roll over to the next. No use-it-or-lose-it game here.

It’s Yours Forever: If you change jobs or move to a different health plan, your HSA comes with you.

Investment Potential: Some HSAs let you invest, just like you'd do with a 401(k) or IRA.

HDHP Clarified: An HDHP typically comes with a lower monthly premium but expects you to pay more out-of-pocket before the insurance steps in.

Under 26 Reminder: If you're still under 26, you can stay on your parent’s health insurance—a point to consider as you evaluate your options.

HSA Contribution Limits: Health Savings Accounts (HSAs) have annual contribution limits like many tax-advantaged accounts. These limits can vary based on whether you have individual or family coverage under a high-deductible health plan. It's crucial to stay updated with these limits as they may change annually due to inflation adjustments.

HSA's Dual Nature: While HSAs are primarily for medical expenses, they have a unique feature. After age 65, you can withdraw funds from an HSA for any purpose, similar to a traditional IRA. While you'll pay income tax on non-medical withdrawals (just as with a traditional IRA), there's no penalty. This makes the HSA a versatile tool for both healthcare and retirement savings.

Questions To Consider:
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1. Have you assessed whether an HDHP with an HSA aligns with your health needs and financial goals?
2. Are you aware of the benefits of an HSA and how it can complement your long-term financial planning?
3. If you're under 26, have you considered the benefits of staying on your parent’s insurance?
4. If you have a HSA, are you maximizing your HSA contributions to take full advantage of its tax benefits?

Next Steps:‍

- Check if your employer offers an HDHP with HSA benefits.
- Consider how much you want to contribute to an HSA and factor it into your budgeting.
- Check the current HSA contribution limits for the year and ensure you maximize your contributions if possible.
- Review your long-term financial plan to see how your HSA fits into your healthcare and retirement strategies.

Completed:‍

- Looked into the benefits of an HSA
- Decided to open and contribute to an HSA
- Reviewed and adjusted (if necessary) my HSA contributions for the year
- Incorporated HSA into my long-term financial and retirement strategy.

An FSA, or Flexible Spending Account, isn't another healthcare option in the sense of a health insurance plan. Instead, it's a financial tool that complements your healthcare plan by providing tax advantages for out-of-pocket expenses.

A Flexible Spending Account (FSA) is a tax-advantaged account that allows employees to set aside a portion of their earnings for specific expenses, most commonly for medical expenses, but there are also Dependent Care FSAs for child or elder care expenses.

Here's how it can be framed regarding managing costs:

Tax Savings: By allocating pre-tax dollars to an FSA, you lower your taxable income. Therefore, the money you spend from the FSA on qualified expenses effectively avoids both income tax and FICA (Social Security and Medicare) taxes, leading to potential savings.

Budgeting: FSAs can assist in budgeting for anticipated out-of-pocket medical and dependent care expenses. Knowing you have a set amount reserved for these expenses can help in financial planning throughout the year.

What to Know:

Pre-Tax Benefit: Contributions to an FSA are made before taxes are taken out, which can reduce your taxable income.

Use It or Lose It: One of the critical features of most FSAs is the "use it or lose it" provision. This means you must spend all the money in your FSA within the plan year or risk losing any unspent funds, though some plans might offer a grace period or allow a carryover of a specific amount.

Types of FSAs: There are different types of FSAs. The two most common are the Health FSA (used for medical expenses) and the Dependent Care FSA (used for child or elder care expenses).

Limitations: There are annual limits to how much you can contribute to an FSA, which can change year to year based on IRS regulations.

Questions To Consider:
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1. How much do I expect to spend on out-of-pocket medical expenses or dependent care costs in the coming year?
2. Am I comfortable with the "use it or lose it" provision, and do I have a plan to spend the allocated amount within the year?

Next Steps:‍

- Estimate your expected medical or dependent care expenses for the upcoming year.
- Decide on the appropriate contribution amount, considering the annual limits and your estimated expenses.
- Regularly monitor and use the funds in your FSA to avoid forfeiting any money.

Completed:‍

- Evaluated potential expenses and decided on FSA contribution.
- Used FSA Funds within the plan year to avoid forfeiture.

FYI: HSA vs. FSA: Quick Overview
Both HSAs and FSAs offer tax breaks on healthcare expenses, but they differ in their features:

HSA Highlights:

Portable: It's yours, even if you switch jobs.
‍Rollover: Unused funds roll over from year to year.
Investment: Can be invested like a 401(k).
Triple Tax Break: Tax deductions on contributions, tax-free growth, and tax-free withdrawals for medical costs.
Post-65 Use: After age 65, use funds for any purpose, with potential taxes on non-medical withdrawals.
Requirement: Must be on a high deductible health plan (HDHP).

FSA Highlights:

Broad Access: Open to employees if offered, regardless of insurance type.
Immediate Funds: The whole annual contribution is available upfront.
Dependent Care: This can be used for childcare or elder care expenses.
Flexibility: No HDHP requirement. Some employers offer rollover or grace periods for unused funds.

In Comparison:

For Long-term: HSAs offer lasting savings with rollover and investment options.
For Immediate Needs: FSAs provide upfront access for large, anticipated medical costs within a year.
Eligibility: No HDHP? An FSA is your tax-advantaged option.

Your choice hinges on personal situations, expected medical costs, and financial aims. Some individuals leverage both HSAs for long-term benefits and FSAs for specific expenses like childcare.

Life Insurance is a dirty word to most. 89% of Americans distrust life insurance agents.  The idea of it makes us want to flee. Do not. Many high-net-worth individuals use these products to increase their wealth. While life insurance may feel like a topic reserved for later in life, it's more than just preparing for the inevitable. It's a financial tool that offers flexibility throughout your life's journey.

It’s not a death policy; it’s a life policy. It’s not just about securing a future for loved ones or when you are married, it’s also about leveraging the monetary value of your life to build wealth.  Here is the excellent part: it allows you to build an asset and be your own banker.  

Decoding Life Insurance Jargon - You will thank me! The following is an alphabetized glossary of Terms

Cash: Money in its physical form. In accounting, cash is money you can access immediately. For example, the money in your checking account is considered cash.

Cash and Life Insurance: Life Insurance is paid out to your beneficiary in tax-free cash. If you accidentally die, your policy is paid out immediately in dollars versus if your money is in your home. If you leave your family a house, it could take months to sell and delay your loved ones' means to pay expenses. It is unclear what the home value is (the price the house will sell for minus the homeowner’s loan and realtor fees). Selling a home involves a lot of factors outside one’s control. A forced sale because your family does not have cash to pay for immediate expenses (bills, funeral, medical, and more) could mean the house leaves them much less cash than you expected. With a life insurance policy, you know exactly how much your family will get immediately.

Cash Accumulation or Living Benefits: A Set Life Policy (Whole life insurance, Universal Indexed Life, aka permanent life insurance) has a cash value component that grows (compounds) over time. This is also called a Living Benefit. This money is yours and can be used anytime for

- Emergencies - e.g., fixing the roof, or repairing the dishwasher
- Opportunities - e.g., starting a new business.
- Education - we prefer this to a 529 plan, because if your child doesn’t go to college or college is free, you can use the money for whatever you like.
- Income Supplement - e.g., you need money to pay extra expenses.

Cash Value = Savings Element = Living Benefit: It equals how much money you have paid to the insurance company plus the tax-deferred compound interest your money has earned.

‍Compound Interest: “Your money makes you money.” Interest accrues and is added to the accumulated interest from previous periods and the principal amount. In a compound account, you earn money on the cash you have saved and the added interest earned.

When your money is in a compound account, a set or variable interest rate number has been assigned to the account. That number is the rate (or how much interest) your money is earning you by sitting in the account.

Death Benefit or Face Amount: Is the amount of money your insurance policy is worth, which will be paid to your beneficiary.

Death Benefit and Taxes: There are none! The money paid to family, friends, a business, or a charity is not taxed.

Estate Creation: When you are younger, you may not have had the time to build an estate (aka a lot of money) and the death benefit would leave your family with more money than your premature death allowed you to save and earn.

Fixed Payment (Premium) Schedule: This is the payment plan you agree to for paying for your policy, either once a month, quarterly, or once a year.

Insurance: Essentially, it’s the transfer of risk. Insurance is a contract that transfers the risk of a financial loss from one party (you) to the insurance company. The insurance provider agrees to cover certain losses if they occur.

Level Premium: OK, let’s break it down so it’s easy to understand. Level literally means “even.” Premium means “the payment required to keep a policy in force” (think ‘rent check’). So, Level Premium means your payment stays at the same price for life. You never need to worry about applying for life insurance in the future.

Level Term Insurance: The simplest form of life insurance, which has a death payout only. It is usually the least expensive.

Living Benefits: These are the financial advantages available to the policy owner (aka the person who buys the policy, aka you) while they are alive! That’s right: Life insurance has benefits YOU can use while YOU’RE alive!

Mortgage Payoff: A whole-life or Indexed Universal policy’s death benefits can be used to pay off a mortgage.

Policy Surrender: You give up the policy and reclaim the money you paid. When you do this (obviously), you give up the death benefit.

Premium: The payment required to keep an insurance policy in force (it’s like rent or mortgage payments: as long as you keep paying it, you keep getting it).

Speculative Risk: You could lose or win. The stock market and gambling are examples of this kind of risk. Insurance does not cover these types of risk. It covers risks where only a loss can occur. You wreck your car, you are too sick to work, you die. Even though getting married is the biggest financial risk people take in their lives, it can not be insured because there is an equal chance it will be a success or failure.
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Survivor Protection: This is what most of us think of when we hear “life insurance.” It means that people are protected financially when they die.

Tax Deferred: While taxes will be owed on this money at some point, they are not due now.

Term Life Insurance: A policy that’s in place for a fixed duration of time. There is a defined start and end date for the policy (i.e., it is not necessarily in effect until you die, if you live beyond the end of the term).

Whole Life Insurance: A permanent insurance policy. As long as the premiums are paid, the policy is in place. If the policy is paid in full while you’re alive, it stays in effect until death.

Back to our regular format 😀

What to Know:

For You and Yours: Life insurance is as much for your benefit as for those you might leave behind. Your siblings, favorite charities, or even outstanding debts – you decide where your benefits go.

Premium Perks: The early bird gets the worm – or, in this case, lower premiums. Starting young can lead to substantial savings in the long run due to reduced rates.

Insurability In-Check: Get covered when you're young, and you'll have insurance even if health challenges arise later.

Facing the Unforeseen: Life is unpredictable. Insurance ensures a financial safety net for your chosen beneficiaries.

Cash Value Considerations: Some policies, especially whole life insurance, double as a wealth-building tool. They accumulate cash value, which you can borrow against or invest elsewhere.

Be Your Own Banker: One of the hidden gems of whole life insurance is the ability to borrow against your policy. Essentially, you can loan money to yourself, and the policy pays off the loan in the event of death. It's a strategy financially savvy folks use to tap into funds without depleting their assets.

Peace in Planning: Security and peace of mind come with knowing you're prepared for life's unexpected moments.

Questions To Consider:
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1. Are you familiar with the "be your own banker" concept associated with whole life insurance?
2. How does life insurance, as a financial tool, fit into your broader wealth-building strategy?
3. Is your fear stopping you from contacting a broker to find out more?

Next Steps:‍

- Investigate different life insurance providers and get a feel for their policies.
- Think about your long-term financial goals and how a life insurance policy can be a wealth-building tool.
- Walk through your fear and anxiety.  Insurance is a simple concept that has been made to seem confusing to justify high percentages and salaries.  Talk to a friend or partner together to take a meeting and get the facts.

Completed:‍

- Received quotes from [___] life insurance providers.
- Identified a policy type and coverage amount aligned with my financial goals.
- Worked on my emotional reaction to Life Insurance.

Renting? Think renters insurance. It doesn't just protect your belongings. It's your defense against unexpected events.

What to Know:

Property Protection: If your personal items are stolen or damaged in incidents like fire, renters insurance has your back.

Liability Coverage: Accidents happen. If someone gets hurt in your rental unit, or you accidentally cause damage to others’ property, renters insurance can cover the costs.

Questions To Consider:
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1. Have you evaluated the value of your belongings to determine the coverage you need?
2. Do you know what events your policy covers?

Next Steps:‍

- Get quotes from a few insurance companies to compare coverage and rates.
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Completed:‍

- Purchased renters insurance tailored to my needs and budget.

For your furry friend's what-ifs. Thinking of adding a pet to your family? Or do you already have one? Pets cost money.  Pet insurance is no longer a luxury because it can offset extreme situations but you have to buy early to get the best rates.

What to Know:

Unexpected Events: Dogs and chocolate don't mix! If your pet ingests something harmful or gets injured, insurance can help cover the medical bills.

Peace of Mind: Regular check-ups or unexpected health issues, pet insurance ensures you don't have to choose between your wallet and your pet's health.

Questions To Consider:
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1. Have you researched the different types of pet insurance available?
2. Are you aware of the common health issues your pet might face?
3. Have you considered all the costs associated with a pet, check-ups, shots, grooming, boarding, food, special food if required, chronic medical issues,  boarding if you travel, coat and booties in the winter, and a few toys? It adds up.

Next Steps:‍

- If considering a pet, budget for your pet and the insurance before bringing them home.
- Review and compare pet insurance plans to find the right coverage.
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Completed:‍

- Obtained pet insurance that aligns with my pet’s needs.