This could potentially lower your overall costs if you're relatively healthy and don't use your insurance much. While the deductible is higher, the monthly premiums are lower. Access to an HSA also means you can contribute tax-free dollars into an investment vehicle that benefits from both tax-deferred growth2. Consider how you can lower your taxescan be a huge help come tax time.
Participating in other tax-deferred savings vehicles via your employer, such as deferred compensation plans, can provide an additional way to lower your taxable income. Typically, these plans will allow your funds to go in with some form of pre-tax benefits and grow tax-deferred, but you will pay ordinary income taxes when those funds are withdrawn.
Don't forget to evaluate the potential for after-tax 401 contributions, too. When contributing to your 401 with after-tax dollars, you can employ strategies such as Roth 401s or Mega Backdoor Roth contributions, where individuals could put as much as $19,500 to $37,500 into Roth IRA funds. Many DIY investors often overlook their after-tax rate of return, which is your investment returnthe taxes you need to pay on any gains.
When you realize investment losses, it can allow you to offset gains elsewhere in your portfolio, which lowers your overall tax bill. Because 2020 has been a very volatile year, it opens up the door to