Year-End Tax Planning | HSA Strategy

BIG DECISIONS & GREY DIVORCE

Divorce is often one of the most complicated events in a person’s financial life. Grey divorce? Uniquely so. Now you have to make a substantial planning pivot to figure out what retirement looks like with a whole new set of variables and circumstances.

While you may feel uniquely alone, this is a scenario we have had the privilege of walking many clients through over the years. In the video below, our team shares the three stages we walk clients through rediscovering their own plan for the future.

LET’S START A BOOK CLUB: Ok, not really. We’ll leave the book clubs to Oprah. We are always looking for helpful and trustworthy voices to help navigate the complexities of money, wealth, and relationships. Morgan Housel just released his new book, The Art of Spending Money: Simple Choices for a Richer Life. It’s GREAT! It’s equal part history, philosophy, and practical. We’ll mail you a free copy, just share your info here.

JOB MARKET: Yes, it’s worth paying attention to the trend in unemployment—and the impact on recent college graduates.

MARKET TOPS: What can investors learn from history and market tops? Even the “unluckiest” of investors still experienced strong returns. What do you notice?

TAXES AND YEAR-END: Don’t let taxes be the tail that wags the dog. Taxes can easily become anxiety-producing, but they don’t have to be. Remember, federal and state income taxes are separate, distinct, and different than long-term capital gains taxes. When you own an investment for more than 365 days, it’s a long-term capital gain. Tax planning and good communication can uncover opportunities to pay less in lifetime taxes.

HSA STRATEGY: Your HSA is potentially the most tax-advantaged retirement account you’re probably underutilizing.

The triple tax benefit is well known:

Tax-deductible contributions
Tax-free growth
Tax-free withdrawals for medical expenses

But the real strategy? Try not to touch it for decades. If you’re financially comfortable now, pay medical expenses out of pocket. Max out your HSA contributions ($8,500/year for families in 2025) and invest them for long-term growth.

The key: Save every medical receipt in a digital folder. It takes a few seconds per expense.

Why this matters: In retirement, you can reimburse yourself tax-free for any qualified medical expense you’ve ever paid—even decades later. There is no time limit on reimbursements. This might transform your HSA from a healthcare account into what could be a stealth retirement vehicle. You get the deduction going in, decades of tax-free compounding, and tax-free distributions in retirement.

CHAT GPT USAGE: This is what the kids call “going viral” …

*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, an investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website here. Past performance is not a guarantee of future results.