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    How to Use an HSA to Save a Lot

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    A new analysis finds that a diligent saver who leaves the money untouched for decades can accumulate $1 million. But not everyone with an H.S.A. can afford to leave the money untapped.It’s possible to amass $1 million in special health savings accounts to use in retirement, a new analysis finds, with several big caveats.You have to start young, contribute the maximum each year and leave the money untouched for decades instead of spending it on medical needs.Health savings accounts, known as H.S.A.s, let people set aside pretax money for health and medical care.To open an H.S.A., you must have a specific type of health plan with a high deductible — an amount you must cover out of pocket before insurance pays. The money can be saved or invested to grow tax-free, and is tax-free when withdrawn and spent on eligible care or products. (The federal government does not tax the accounts, but some states assess state taxes.)Because of their robust tax advantages, H.S.A.s are seen as a valuable tool to save for health needs later in life, including costs that aren’t covered by Medicare, the federal health plan for older Americans. H.S.A. funds can also be spent on nonmedical costs after age 65 without penalty. The money is taxed as ordinary income.The new analysis by the Employee Benefit Research Institute, a nonprofit group, assumes that at age 25, a saver begins contributing the maximum allowable amount each year ($4,300 for an individual in 2025 — the amount is tweaked annually for inflation — and an additional $1,000 for people 55 and older) and continues those contributions through age 64 with no withdrawals, “regardless of whether the individual uses any health care services.” It also assumes the funds are invested and earn a 7.5 percent rate of return.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      How Donald Trump’s Presidency Could Impact Retirement Rules

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      Readers had questions about individual retirement accounts, distributions and access to brokerage accounts if they moved away from the U.S. Here are some answers.Your retirement accounts may be the biggest component of your net worth. Or maybe those large balances are still only a goal, and you want to know if any changes coming in the next four years will help you get there — or get in your way.Of the 1,200 or so money-related questions we’ve received from readers in the days since the presidential election, many have been about retirement. We have some answers for what we know and context for what we don’t yet know. Most of them have nothing to do with Social Security; my colleague Tara Siegel Bernard answered questions about that program last week.But first, here’s an important caveat that is true in any administration, but especially in one like this: For things to change, President-elect Donald J. Trump has to want things to change, act on that desire and then succeed. If lawmakers are involved, they also have to have the desire, follow through and pass legislation.There will be plenty of noise, but in this particular category, it’s possible that not much of substance will look different four years from now.What did Mr. Trump say he wanted to change about individual retirement accounts or 401(k)s?Not much. Neither Mr. Trump’s campaign website nor the Republican Party platform that it pointed to said anything about I.R.A.s or workplace retirement accounts like 401(k)s, with one exception that probably wouldn’t affect many people.On his campaign website, Mr. Trump sounded off about environmental, social and governance, or E.S.G., funds and their place in workplace retirement plans. During his first term, the Labor Department issued a rule related to what sorts of funds an employer — which must act in employees’ best interest as a so-called fiduciary — can use in those plans.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Why States Are Offering Workers at Private Companies Access to I.R.A.s

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      With the plans, workers are automatically enrolled and contribute through payroll deductions. The goal is to help more Americans save for retirement.Traditional pensions are increasingly rare. About half of employees at private companies don’t have access to a retirement plan. And retirees themselves say they haven’t saved enough.That is why states have decided to step in and offer retirement accounts for private-sector employees, helping workers to save more and, new research shows, perhaps even spurring companies to offer their own workplace retirement plans.Automatic individual retirement account programs, known as “auto-I.R.A.s,” typically require private employers that don’t offer workplace retirement plans like 401(k)s to register for state-run plans.Workers are automatically enrolled in I.R.A.s, often with 3 to 5 percent of their income deducted from their paychecks, but can change the amount or opt out if they prefer. The employers — typically small businesses and nonprofits — provide access to payroll deductions to ease worker contributions, but don’t oversee the plan or pay fees.Auto-I.R.A.s are now available in 10 states, including New Jersey and Delaware, which started plans this summer, and soon will be in seven more, according to the Georgetown University Center for Retirement Initiatives. At the end of October, there were more than 930,000 accounts with $1.7 billion in savings for the eight plans for which data was available, according to the Georgetown center.Workers can, of course, open an I.R.A. on their own at a bank or brokerage. But few workers do so, perhaps because of inertia or because they are intimidated about making investment choices.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Their Parents Are Giving Money to Scammers. They Can’t Stop Them.

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      One son couldn’t prevent his father from giving about $1 million in savings to con artists, including one posing as a female wrestling star. The two became estranged.When Chris Mancinelli walked into his father’s home for the first time after the 79-year-old man died last summer, he stopped to look at family photos displayed on the refrigerator door. Near a crayon drawing spelling out “grandpa” in rainbow colors were photos of his father’s three granddaughters at a swimming pool.But one image jumped out: a photo of Alexa Bliss, a professional wrestling personality.Mr. Mancinelli’s father, Alfred, was completely smitten with the star — or at least with the con artist impersonating her. He was convinced he was in a romantic relationship with Ms. Bliss, leading him to give up about $1 million in retirement savings (and his granddaughter’s college fund) to the impostor and a varied cast of online fraudsters he interacted with over several years.When Mr. Mancinelli tried to intervene, moving his father’s last $100,000 to a safe account, Alfred sued him — his loyalty was to “Lexi.”“There was nothing we could do to convince him,” said Mr. Mancinelli, 47, a chemical engineer in Collegeville, Pa. An elder care specialist deemed Alfred “really sharp,” he said, but lacking purpose.Mr. Mancinelli and others who have tried to awaken their loved ones from this trance often feel powerless, even after they’ve done everything to shatter the fiction and protect their assets. They say it’s as if their parent had been brainwashed into a cult.In some ways, they were: These victims were slowly groomed by con artists posing as love interests, investment advisers or government officials, among others. Once ensconced inside this bubble, they are unable or unwilling to acknowledge that they have become victims. Even when their own children are warning them of the con.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      When the Stock Market Drops, Stay Calm and Do Nothing

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      The markets are in turmoil, but you know what you’re supposed to do now, right? Let’s all take a deep breath, tie our hands behind our backs and say it together: We will not sell stocks in a panic. We will, in fact, do nothing at all right now.Many of the people who are trading today are professional investors of various sorts. Here’s a dirty little secret about, say, hedge funds: All of their trading in reaction to world events doesn’t lead most of them to do better than sticking their money in an index fund that tracks the stock market. Mutual fund managers don’t do much better.So there is no reason to think that you can predict what will happen in the markets in the next few hours or in the near future. It’s better not to try.Remember, much of the money you have in the stock market is probably for retirement anyhow. Chances are, you won’t need it for many years or even decades.But rational thinking often eludes us in moments like this. So here are a few things that may make you feel better.First, look at the performance of your investment portfolio over the last year or three or 10. Chances are, you’ve made a lot of money if you’ve invested regularly and then left things alone. Nice going! Try to think about those enormous gains and not any smaller paper losses from today’s drop.Second, consider the early days of the pandemic, when stocks fell by more than a quarter in the space of a month or so. Who would have thought that within a year, market gains would wipe out those losses and then some? But that’s what happened.Finally, and as ever, you are not the market. You are the sum of many large parts, including home equity and future salary, not to mention the immeasurably high returns that come from friends and family and playing outside and taking in art.Go fly a kite or wander among beautiful buildings and check in with the market again tomorrow. More

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      Florida Retirees Flaunt Loyalties to Donald Trump and Kamala Harris

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      In The Villages, Florida’s retirement mecca, pro-Trump residents have been galvanized by a surprising showing of support for Kamala Harris.The golf carts lined up by the hundreds, festooned for Trump fandom: a teddy bear with orange hair and a red tie. A surprisingly realistic Trump mask. A Trump rubber duck. An inflatable Trump tube, depicting his mouth open and fists pumped in the air.On Saturday afternoon, The Villages, Florida’s retirement mecca, was abuzz with a parade for former President Donald J. Trump — even as Tropical Storm Debby menaced.The Villages is a sprawling planned retirement community northwest of Orlando and a solidly Republican stronghold.Nicole Craine for The New York Times“If Trump could take a bullet,” said Tommy Jamieson, the parade organizer, referring to last month’s assassination attempt, “then we can take a little rain.”The people of The Villages, a sprawling planned retirement community northwest of Orlando and a solidly Republican stronghold, know that they live in Trump Country. But a week earlier, supporters of Vice President Kamala Harris, the presumptive Democratic presidential nominee, held a golf cart rally of their own, drawing widespread attention, to the chagrin of Trump-supporting Villagers.So Mr. Trump’s backers — with some donning T-shirts that read “I’m voting for the felon” and “I’m voting for the outlaw and the hillbilly,” referring to Mr. Trump’s running mate, JD Vance — set out to show them up.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      How a Retirement Withdrawal Can Lead to a Perjury Conviction

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      A prominent lawyer was recently sentenced to home confinement for falsely claiming hardship to withdraw funds. How desperate must you be to take money out?Sometimes, it’s illegal to spend money that you set aside for yourself.When you save money in many types of workplace retirement accounts, the Internal Revenue Service doesn’t collect income taxes on that money until it’s time to take it out, when you’re older.Need money before then? Certain types of “hardship” withdrawals are permissible. But you must have a very good reason, and you definitely can’t lie about it.Last week, a sentencing hearing took place after a rare case involving this sort of legal violation. Federal prosecutors had won convictions against Marilyn Mosby, the former Baltimore prosecutor who may be best known for pursuing charges against the police officers in connection with the death of Freddie Gray in 2015, for both impermissible withdrawals and making a false mortgage application when she bought a condo in Florida.Ms. Mosby will spend up to 12 months in home confinement, absent a successful appeal or a presidential pardon, which she has requested.Her case is a complicated one, given that the sentence isn’t just for impermissible withdrawals. And her false claim of financial hardship to withdraw money from her city retirement account took place during the coronavirus pandemic in 2020, when alternative, one-time-only rules were in effect.Still, hardship withdrawals are widely available.What follows are some questions and answers about what happened in Ms. Mosby’s case and what the rules actually are. Keep in mind that employers have a fair bit of discretion in how they set up the rules for their retirement plans, and there may be slight differences between the rules for 401(k)s, 403(b)s and 457 plans.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      What to Do With an Inheritance

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      A sudden windfall while grieving can be an emotional minefield, particularly for younger adults. Experts share ways to handle it wisely.Michael Hay knew his mother was financially secure, but he didn’t fully know her situation until she was admitted to a hospital in August and he was granted her power of attorney. Even then, it wasn’t until his mother’s unexpected death, about a month later, that Mr. Hay understood that he and his two sisters were about to inherit a sum that would make a real difference in their lives.Nine months later, Mr. Hay, 47, says he’s still processing the shock of suddenly losing his 78-year-old mother while gaining an inheritance he wasn’t prepared to receive.“I still call it ‘my mom’s money’ even though it’s legally in my name,” said Mr. Hay, who works at a tech start-up and lives in Madison County, N.Y.Mr. Hay’s reaction to his sudden wealth is not unusual. “It is a big shock both emotionally and financially, and I don’t know that anyone is ever prepared,” said Kathryn Kubiak-Rizzone, founder of About Time Financial Planning in Rochester, N.Y. She recommends that beneficiaries not make any financial decisions for the first six months because they’re likely to still be grieving.Research shows that more adult children may find themselves unexpectedly inheriting wealth over the next two decades. The silent generation, or people born roughly between 1928 and 1945, and its successors, the baby boomers, are expected to transfer significant wealth to members of Generation X and millennials over the next 20 years, according to the Wealth Report, a publication from Knight Frank, a London global property consultant.Federal Reserve figures show that half of all inheritances are less than $50,000, but with boomers reaching 80 and beyond, members of their family may begin to inherit more wealth. More than half of millennials who are anticipating an inheritance from their parents or another relative expect to gain at least $350,000, according to a survey by Alliant Credit Union in Chicago. (Whether they actually receive that much is another question.)We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Money in College Savings Accounts Can Now Go Toward Retirement

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      But there are caveats to moving the money into Roth I.R.A.s, and the government still has to issue guidelines about the option.Starting this year, some of the money in 529 college savings accounts can be used for retirement if it’s not needed for education.New rules under the federal law known as Secure 2.0 allow up to $35,000 in a 529 account to be rolled over to a Roth individual retirement account for the beneficiary of the 529 account if certain conditions are met.State-sponsored 529 accounts, named for a section of the tax code, are used to pay for education expenses — mainly college costs. Money deposited in the accounts grows tax free and can be withdrawn tax free to pay for eligible expenses like tuition, housing, food and books.The new Roth option is aimed at parents who may be reluctant to save in a 529 because they worry about having to pay income taxes and a penalty if for some reason the funds aren’t needed for college and they want to withdraw the money.“It is parents’ No. 1 objection to opening a 529,” said Vivian Tsai, chair emeritus of the College Savings Foundation, a group that includes big financial firms that run the state college savings programs. “The barrier is really psychological.” (Ms. Tsai is also senior director and head of relationship management for the education savings unit at TIAA, a large investment firm that manages 529 plans in seven states.)Many families struggle to save for college, and accumulating “too much” money is usually not a problem. “The vast majority of account holders do not save enough,” Ms. Tsai said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More