Pet Insurance Guide — Worth the Cost & What Coverage to Choose?

Pet Insurance Guide — Worth the Cost & What Coverage to Choose?


For many people, pets represent an unlimited source of comfort, companionship, and joy that they simply couldn’t imagine life without. Almost 70 million US households are proud dog owners, and over 45 million families share their living space with a feline friend. In fact, overall pet ownership across the states accounts for around 70% of the entire US population.


Protecting our beloved pets, however, isn’t always simple. Unexpected illnesses, broken bones, and unforeseen medical conditions can unfortunately arise out of nowhere; and given that veterinary care prices have risen by 10% in the last year alone, many pet owners may struggle to provide the care that their furry friends need. 


Taking this into account, does it make sense to get pet insurance? And if so, how do you determine which one to get? Below we’ll discuss the pros and cons of the most common forms of pet insurance in the US, including the coverage you can expect and ultimately whether insurance is worth it for the average family.  


Uninsured treatment costs

Before we look at the expected costs of pet insurance itself, let’s go over the price of some common veterinary procedures performed out-of-pocket with no coverage at all. Most procedures will increase in price relating to the size of your pet, meaning canine procedures often cost more than those performed on a feline, and any services that require a specialist will come with their own premium.



Cost for Dogs

Cost for Cats

Broken bone






Ingested objects



Heart murmur









Bladder infection




Animal-specific conditions such as feline kidney disease and hereditary conditions like hip dysplasia in larger dogs should also be considered when weighing up your pet care options. Treatments for these issues can drastically increase your expenses over the course of your pet’s life, so it’s worth gaining a clear understanding of how likely these conditions are to appear somewhere down the line.


Treatments covered by pet insurance

Now that we know a little about the costs of common veterinary treatments, let’s take a look at the procedures you can expect your pet insurance to cover. 


Pet insurance plans often come in two forms: accident-only coverage and accident and illness coverage. As expected, accident-only plans just cover expenses related to an accident (broken bones, ingested objects, etc.), whilst accident and illness plans also provide added protection against the costs of ongoing treatments for issues like cancer, ear infections, and other long-term illnesses. 


Accident and illness plans are, of course, generally more expensive, but for pets with a higher predisposition toward long-term illness, they can end up saving a lot of money in the long run.


You can expect the average accident and illness policy to cover:

  • Dental illnesses
  • Chronic conditions
  • Toxic ingestion
  • Surgery
  • Hospitalization
  • Broken bones
  • Breed-specific conditions
  • Prescription medications
  • Emergency care


Some accident and illness pet insurance policies also offer routine care coverage as part of your plan. Opting for this additional coverage will take care of recurring wellness procedures like microchipping, routine check-ups, and vaccinations throughout the duration of your pet’s life.  


Treatments not covered by pet insurance

There are some common exclusions to pet insurance policies that are worth looking out for. 


These often include procedures not accepted by your state’s medical board (experimental treatments) and any treatments for pre-existing conditions that your pet had before the start of your policy. However, this does vary across providers, with some accepting coverage for curable conditions or for conditions that your pet seemed to be free from for an extended period before the start of your policy.


Other common pet insurance exclusions include:

  • Food
  • Nutritional supplements
  • Grooming
  • Licenses and certifications
  • Waste disposal services


Pet insurance deductibles

As part of your pet insurance policy, you’ll need to decide on a deductible amount. This describes the amount that you’ll pay for any procedures before your pet insurance will begin to pay out. This value can range between $50 to upwards of $1000 and will depend upon your level of coverage.


Pet insurance deductibles generally come in two varieties: 


Annual – You pay the deductible each policy term. Once this value is met, you pay nothing further until the next year.


Per-condition – You pay your deductible amount for each individual condition or incident as and when they occur. 


You’ll also need to choose a reimbursement level. This is the amount your insurer is expected to pay after your deductible is met. Reimbursement levels are generally between 70–90%, though there are a few select providers that will reimburse policyholders by a full 100%.  


Average pet insurance costs

Now that we have a clear understanding of the finer details, let’s see how much pet insurance costs for the average consumer.


Pet insurance prices for dogs come in at around $20–$44 a month for dogs and $12–$46 a month for cats. That’s about $35 a month for dogs and $28 a month for cats on average to make up $5,000 in coverage for the year.


The price you pay will vary to some extent depending on a few important factors. Your pet’s breed, for example, needs to be considered as some breeds are more susceptible to long-term conditions. Age, gender, and location are a few other factors that will affect the overall cost of your insurance policy. 


Is pet insurance worth it?

Whilst pet insurance providers (like any business) are certainly looking to turn a profit, that doesn’t mean their services won’t be worthwhile to you and your pet. The average pet owner visits their vet 2.5 times a year, and with 42% of pet owners claiming that they’re unable to cover an unexpected vet bill, a decent pet insurance policy could be a lifesaver in more ways than one. 


If your pet carries an increased risk of developing a long-term health condition, pet insurance can become even more of a necessity, but in the end your choice will depend on the unique circumstances that you and your pet find yourselves in.


Weighing up all the facts and considering the rising costs of veterinary visits, we believe it’s at least worth looking into a pet insurance policy for most pet owners out there.



Written Exclusively for by Madison Smith



Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Medicare Income-Related Monthly Adjustment Amount (IRMAA) Surcharge – What Does It Mean, What Can I Do, and How?

Medicare Income-Related Monthly Adjustment Amount (IRMAA) Surcharge – What Does It Mean, What Can I Do, and How?



Co-written with Jeffrey Barnett


The first question on many retirees’ minds is how to pay for expensive healthcare costs and health insurance when you’re no longer covered by the employer plan you relied on throughout your career. Medicare is the U.S. government’s answer for supporting healthcare costs throughout retirement. While you might have already enrolled in Medicare or are at least looking forward to beginning benefits at age 65, you may not know how Medicare premiums work. Let’s explore Medicare premiums and an important potential speedbump known as IRMAA.


What Is IRMAA?


To provide some background, approximately 75% of the costs of Medicare Part B (Medical Insurance) and Part D (Prescription Drug) are paid directly from the General Revenue of the Federal Government, with the remaining 25% covered through monthly premiums paid by Medicare enrollees. If you receive Social Security or Railroad Retirement Board benefits, your Medicare Part B premiums are typically deducted automatically from your monthly benefits. For those who don’t receive these benefits, you’ll receive a bill to pay your premiums instead. Medicare premiums increase as your income grows through Income-Related Monthly Adjustment Amount (IRMAA), which is an additional surcharge for higher income individuals on top of the 2021 Medicare Part B baseline premium of $148.50.


Medicare premiums and any surcharges are based on your filing status and Modified Adjusted Gross Income (MAGI) with a two-year lookback (or three years if you haven’t filed taxes more recently). That means your 2021 premiums and IRMAA determinations are calculated based on MAGI from your 2019 federal tax return. MAGI is calculated as Adjusted Gross Income (line 11 of IRS Form 1040) plus tax-exempt interest income (line 2a of IRS Form 1040). The table below details the base premium amount you’ll pay for Medicare in 2021 depending on your MAGI and filing status, inclusive of any additional IRMAA surcharge.




Fortunately, the Social Security Administration (SSA) tracks these numbers for you and uses MAGI data from the IRS. For every year that they determine IRMAA applies to you, you’ll receive a pre-determination notice explaining what information was used to make the determination and what to do if individuals feel the finding is incorrect, like due to a life-changing event as defined by the SSA. After 20 or more days, the SSA sends another notice with additional information regarding your appeals rights. For the instances you feel an incorrect determination was made, you can request a “New Initial Determination.”


Am I Eligible to Request a New Initial Determination?

There are five qualifying circumstances where an individual may be eligible to request a “New Initial Determination.” They are:

  1. An amended tax return since original filing
  2. Correction of IRS information
  3. Use of two-year-old tax return when SSA used IRS information from three years prior
  4. Change in living arrangement from when you last filed taxes (e.g., filing status is now “married filing separately” but you previously filed jointly)
  5. Qualified life-changing event(s)


According to the SSA, a Life-Changing Event (LCE) can be one or more of the following eight events:

  • Death of spouse
  • Marriage
  • Divorce or annulment
  • Work reduction
  • Work stoppage
  • Loss of income-producing property
  • Loss of employer pension
  • Receipt of settlement payment from a current or former employer


A common scenario we often see is with new retirees age 65 or over where income is much lower in retirement than it was two years ago, but the SSA determines that the IRMAA surcharge should be applied to your premium costs given the lookback period. Fortunately, an exception can be requested under the “work stoppage” LCE, and we can help you navigate that process. Luckily, this is typically irrelevant after the first or second year of retirement since post-retirement income is often significantly reduced and naturally falls below the IRMAA threshold. Another common scenario for retirees is having portfolio income that pushes you above the IRMAA tiers. However, it’s important to point out that portfolio income from things like capital gains or Roth conversions are not allowable exceptions to request for the IRMAA surcharge in a high-income year.


If you don’t qualify to request a new initial determination based on the 5 qualifying circumstances noted above, you also have the right to more formally appeal the determination, which is also known as requesting a reconsideration.



Requesting a New Determination


If any of the above life-changing events apply, individuals are likely eligible to request a new initial determination by calling their local Social Security office or, alternatively, completing and submitting this form for reconsideration along with appropriate documentation. We highly recommend calling the Social Security hotline at 800-772-1213 to discuss if more than one LCE applies to you, if you have questions about why IRMAA applies to you, or if you have questions about requesting a reconsideration.


We know that Medicare can be tricky and that this only scratches the surface, so we also encourage you to contact us if you have any questions. We regularly serve as a resource for questions around enrolling for Medicare along with many of the other factors involved in planning for retirement, and we are happy to help you as those questions move to the forefront.


Income Thresholds:

Life-Changing Event:

Determination Notices:


Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future returns; please seek advice from a licensed professional.

Washington Capital Gains Tax and Long-Term Care Payroll Tax – New Taxes and Planning Opportunities in 2022

Washington Capital Gains Tax and Long-Term Care Payroll Tax – New Taxes and Planning Opportunities in 2022


The start of the new year is often a time when tax changes go into effect. At the Federal level, the Build Back Better Act, which had some significant tax changes, has not passed. For now, it is unclear if the legislation will pass in 2022. It is also unclear if any of the changes would apply in 2022 or would only apply to future years if it does pass.

In Washington State, 2022 brings the scheduled implementation of two new taxes that have the potential to impact many Merriman clients: the capital gains tax and the long-term care payroll tax.


Washington State Capital Gains Tax

Starting in 2022, Washington will apply a 7% tax on realized capital gains above $250,000. The most common assets that will generate income subject to this tax include:

  • Sales of stocks and bonds (and mutual funds, ETFs, and other pooled investments)
  • The sale of a business above a certain size


Other assets are specifically exempt from the capital gains tax, including:

  • All real estate
  • Sale of small businesses below a certain size
  • Investments inside retirement accounts
  • Restricted stock units (RSUs) at the time they vest (though their later sale could result in taxable capital gain income)


How the tax is calculated

This 7% tax is applied only on capital gains above the $250,000 threshold. It is not impacted by other income. The same threshold applies to married and unmarried households.

Example 1: John sold $500,000 of Microsoft stock in his taxable investment account that was acquired for $240,000. He has no other income in 2022. This results in $260,000 of capital gains. Since $260,000 – $250,000 exemption = $10,000, John would owe ($10,000 x .07 = $700) in capital gains tax.


Example 2: Sally has $800,000 of income from her job. She sold $500,000 of Amazon stock that was acquired for $300,000. Because the $200,000 of realized capital gain is less than the $250,000 exemption, she does not owe the capital gains tax. Her other income is irrelevant to this calculation.


Example 3: Matt and Molly are married taxpayers filing a joint tax return. Matt sells stock in his individual taxable account that realizes $150,000 of capital gains. Molly sells stock in her individual account that realizes $120,000 of capital gains. Even though they are both individually below the limit, because they are married and are filing a joint tax return, their total gains are $20,000 above the $250,000 limit; they would potentially owe $1,400 in capital gains tax.


When are payments made?

According to the state Department of Revenue webpage, the tax will be calculated on a capital gains tax return in early 2023. The tax payment will be due at the same time the taxpayer’s federal income tax return is due.

There does not appear to be a requirement to make estimated tax payments before the end of the year the way some taxpayers are required to do for federal income tax.


Potential court challenge

Opponents have challenged the law saying this capital gains tax is unconstitutional under the state constitution. A hearing is scheduled for February 2022. Any ruling is expected to go to the state supreme court later this year.

At this time, we are encouraging families who may be impacted by this new tax to plan under the assumption that it will go into effect.



Long-Term Care Payroll Tax

We have previously shared about Washington’s new long-term care payroll tax. The tax is 0.58% on all wages (including RSUs at the time they vest) and is used to pay for long-term care benefits ($580 on $100,000 of income).

Taxpayers were given the opportunity to exempt themselves from the payroll tax by securing a private long-term care insurance policy before November 1, 2021, and requesting an exemption from the state.


Delay in implementing the payroll tax

In December 2021, Governor Inslee asked the state legislature to delay implementing the payroll tax. That has not happened yet, and employers are technically still required to withhold the payroll tax from employee paychecks.

The requested delay was to allow time to address some concerns, including:

  • The current program is limited to Washington residents. Residents could pay in for an entire working career, move out of state in retirement, and then not be eligible for benefits.
  • The current program has no mechanism for new workers in Washington State to opt out.
  • The current program requires workers to pay into the system who may never be eligible for benefits. Since you must pay in for 10 years to qualify for benefits, older workers who retire before reaching that point will pay in but not qualify for benefits. Military spouses and other out-of-state residents who work in Washington may be in a similar situation.
  • The current program has no mechanism to ensure that individuals who opted out of the payroll tax maintain their insurance.

It is expected that implementing the payroll tax will be delayed, but it will still likely go into effect in some similar fashion in 2023 or 2024.



Planning Opportunities

The biggest planning opportunity for the capital gains tax is remaining mindful of how much capital gains income is being realized each year. Several large area employers, like Amazon and Microsoft, along with many smaller employers have seen a significant increase in stock values.

At Merriman, we believe in the benefits of diversifying investments and not remaining too concentrated. For tax purposes, it is often beneficial to realize those capital gains over multiple years to spread out the tax impact.

Since the 7% state capital gains tax is in addition to the federal capital gains tax, it likely makes sense to limit those gains to $250,000 per year where possible.

For the payroll tax, there is a bit of a holding pattern. There was a rush of activity in 2021 to qualify for the exemption, and that deadline has passed. Now that implementation has been delayed, we will wait to see what adjustments, if any, happen and what clients should do to plan for it.

We will update with further adjustments for federal and state taxes. Your financial advisor can provide additional specific guidance.



Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable; however, Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal, or accounting advice, and nothing contained in these materials should be relied upon as such.


Navigating Healthcare Options

Navigating Healthcare Options


We strive to deliver peace of mind to our clients, not just about investments and taxes but about everything that touches their financial lives. One subject that continually comes up is healthcare. How will I be able to afford healthcare? Should I work until age 65 so that I qualify for Medicare? To help answer this question, we partner with outside experts to help our clients evaluate different healthcare options. We spoke to Ed Steffens at Propel and asked about health insurance through the Exchange versus COBRA.


How do you help your clients?

I help clients navigate their options with individual healthcare, Medicare, life insurance, and long-term care insurance.


COBRA vs Affordable Care Act (ACA)

Since the rate increases in the individual market back in 2017, COBRA is usually the better option, depending on the tax credits (subsidies) available to you. If you have to pay full price on the ACA exchanges, COBRA plans tend to be better. The network of doctors with the COBRA plan option has fewer limitations and is generally available throughout the US. These networks offer coverage in and of network, with higher costs using an out of network doctor.

ACA plans, on the other hand, use more restrictive networks of doctors. Generally, your available network is your home area and surrounding areas. There is no coverage out of network, with exception to true emergencies. In this case, ER and ambulance are covered anywhere in the country.

Before you choose a COBRA or ACA plan, spend time with a professional and/or on the healthcare website: and  Subsidies are estimated based on the current year of total estimated MAGI. When determining MAGI, your income includes unemployment benefits and your spouse’s income. If the tax credits are deep enough, ACA may end up being a better option than COBRA.


When should people reach out to you?

The sooner the better. Separation from service, marriage, death, permanent move, and the birth of a child are all qualifying events. It might just be a 10-minute call. If tax credits are an option, however, a longer conversation will be necessary. For Medicare, please reach out three months before your 65th birthday.


How are you compensated?

I am compensated by salary and not by enrollments. This allows me to work in the best interest of my clients.


What kind of clients do you most enjoy working with?

I enjoy helping everyone. People who are in their fifties and sixties are the most common clients I work with, as they are more likely to experience the above-mentioned qualifying events—including those who are contemplating retirement. I am unable to help people with Medicaid though Such cases are redirected back to the state.


What would you tell someone who does not think they should retire because of the cost of healthcare?

People should analyze their situation and explore the options. They are often pleasantly surprised. It should really be explored on a case-by-case basis, regarding both the coverage available and the cost of coverage. This analysis should be taken into account along with the individual’s entire financial picture in order to make this life transition.


What are common misconceptions about healthcare on the open market?

It goes both ways. Some people think they should get tax credits but don’t. Other people think they won’t get credits and do. The amount of tax credits you may receive is unrelated to the level of health coverage (labeled as Gold, Silver, or Bronze, depending on what coverage you purchase). In general, the three tiers of health coverage look like this:

Bronze level plans: Lowest cost, highest deductibles, highest cost sharing after deductible.

Silver level plans: “Reasonable” cost, deductibles and cost sharing.

Gold level plans: Highest cost, highest level of coverage, lowest deductibles and cost sharing.


Tell me about the recent changes in the stimulus package. 

The new administration opened new enrollments through May 15, and then extended it to August 15t. They raised income limits on tax credits. Everyone has an opportunity to make changes now through August 15th. The government is trying to make insurance as accessible as possible. You can use a subsidy calculator for an estimate.


How should clients contact you?

I can be reached at 541.494.7714 or via email at to schedule an appointment.


Written by: Michael Van Sant, CFP®. CSRIC™

Disclosure: Edward Steffens is a licensed insurance agent/broker for Propel Insurance. All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the article. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any particular individual. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax or legal or accounting advice, and nothing contained in these materials should be taken as such.

Getting the Most From Your Health Savings Account (HSA)

Getting the Most From Your Health Savings Account (HSA)


Are you aware of the many planning aspects of HSAs? We’d like to share some of the more in-depth aspects with you here so you can get the most from your HSA. However, if you’re unfamiliar with HSAs or need a quick reminder about them and high-deductible health plans (HDHP), then we encourage you first to read our blog article: A New Perspective on Health Savings Accounts.

HSAs are more tax efficient than other retirement accounts.

HSA accounts are often referred to as “triple tax-exempt” because your contributions, earnings, and qualified withdrawals are not taxed. This triple tax-exempt nature of HSAs makes them more attractive than other retirement accounts that are only double tax-exempt, including 401(k)s, IRAs, and Roth IRAs.


Employee HSAs could be considered quadruple tax-exempt.

Additionally, if you’re an employee and make HSA contributions via payroll deduction, then you have an added benefit of avoiding FICA (Social Security and Medicare) and FUTA (unemployment) taxes on those contributions. Contributions to your 401(k) via payroll deductions don’t avoid these taxes.


Don’t use your HSA for current medical expenses and invest the funds.

In order to fully benefit from the triple or quadruple tax-exempt nature of an HSA, you’ll need to let the account grow. It’s important to leave your contributions in your HSA and to invest them for the most potential growth.

Note: This means you’ll need to pay for medical expenses out of pocket, which can get expensive when you have a high-deductible health plan (HDHP).


Save receipts for current medical expenses to reimburse yourself in the future.

There is no time limit for reimbursing yourself for qualified medical expenses, so you can reimburse yourself in the future—even 30 years from now—for expenses incurred today. You must keep records of these expenses, so it’s important to keep your receipts. You’ll have plenty of medical expenses in retirement, so saving receipts for small expenses may not be worth the effort. Consider saving receipts for larger current expenses.

Note: You can’t reimburse yourself for medical expenses incurred before the HSA account was established or for medical expenses deducted on Schedule A of your tax return as itemized deductions.


Maximize your catch-up contributions in a family HDHP.

You can make an annual $1,000 catch-up contribution to your HSA beginning at age 55. If you have a family HDHP or two separate HDHPs, then you can potentially make two catch-up contributions—one for each spouse who’s 55 or older if the catch-up contributions are made to each of their separate HSA accounts.

Note: Most family HDHPs are set up with one HSA account in the employee’s name. If the spouse doesn’t have their own HSA account, then they will need to open one in order to make their own catch-up contribution.


Contribute after you stop working and before you enroll in Medicare

Unlike an IRA or Roth IRA, you don’t need to have earned income to be able to contribute to your HSA. You can contribute to your HSA if you have an HDHP and haven’t yet enrolled in Medicare. If you retire before Medicare age, then you’ll need to either continue your coverage through your employer with COBRA or get individual coverage. If either of these coverages is an HDHP, then you can contribute to an HSA.

Note: You can’t contribute to an HSA once you enroll in Medicare because Medicare is not an HDHP. Enrollment in Medicare includes enrollment in any Medicare coverage—Parts A, B, C, D, or a Medigap plan.


Contribute tax-free funds from your IRA in a one-time rollover.

You can make a one-time rollover from your IRA to your HSA up to your contribution limit for the year. If you wait to perform this rollover until you’re age 55, you can rollover both the maximum annual contribution and your catch-up contribution. This rollover must be transferred directly from your IRA into your HSA in order to be tax-free.

Note: A good candidate for this rollover would be someone who has a large IRA and might already be looking for openings to convert some of their IRA to after-tax accounts, such as a Roth IRA.


Use your HSA to pay for certain insurance premiums.

You can use your HSA to pay for certain health insurance premiums that are considered qualified expenses, including long-term care insurance (subject to limits and restrictions), healthcare continuation such as COBRA, healthcare coverage while receiving unemployment benefits, and Medicare or other healthcare coverage at age 65. Premiums for a Medicare supplemental policy are not considered a qualified expense.

Note: The annual amount of qualified long-term care premiums is limited and based on your age, which ranges from $420 for those age 40 and younger to $5,270 for those age 71 and older. The long-term care policy must also meet certain requirements itself to be qualified.


Non-qualified withdrawals after age 65 aren’t penalized.

Withdrawals for qualified expenses for yourself, your spouse, and your dependents are not taxable and not subject to a penalty. Non-qualified withdrawals are subject to a 20% penalty and tax, but the 20% penalty no longer applies once you reach age 65. Non-qualified withdrawals after age 65 are taxable, making them comparable to IRA withdrawals. While you’ll lose the triple-tax exempt nature of an HSA, your contributions and growth were tax-free.

Note: If you must take taxable distributions and you aren’t yet 65, then consider distributing funds from an IRA before distributing funds from your HSA to avoid the 20% penalty. Keep in mind that there is a 10% penalty for IRA withdrawals prior to age 59 ½.


Qualified distributions for a deceased owner are non-taxable within one year of death.

If you pass away and your beneficiary is your spouse, then they can continue the HSA as their own. If the beneficiary is not your spouse, then the value of your HSA at the time of your death is distributed and deemed taxable income for them. However, your beneficiary can use the HSA to pay for your outstanding qualified expenses within one year of your death. Funds used for this purpose by a non-spouse beneficiary are excluded from the value of the account, thus lowering their taxable income.

Note: Discuss your outstanding qualified expenses with your beneficiary. They can only use the account to pay for your expenses after your death if they have the necessary information and records.


Getting the most out of your HSA can be difficult, especially while trying to do so over a long period of time. It’s important to integrate HSA planning into your overall financial goals and retirement plan. As financial advisors, we love to help our clients accomplish these things, so please reach out to us if you have any questions. We’re here to help!



Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Wellness as a Financial Strategy

Wellness as a Financial Strategy


I work with clients to create plans for spending, saving, investment, taxes, insurance, estate, and all the other items that, if managed, can lead to financial security and peace of mind.  Often, after all the planning, I get the question: What else can I do to help my financial situation?  While a good plan can help mitigate the ups and downs of the markets and the economy, it still can lead many to feel like they have little control over their situation.  This question often stems from a sense of not feeling totally in control of your financial situation because of volatile markets, the economy—and recently, a global pandemic.

One area I have started to introduce to my clients as a financial strategy is to consider doing an evaluation and plan for their physical and mental health.  The estimated average healthcare costs for a couple in retirement is $285,000.  This figure can include Medicare supplement premiums, deductibles, drugs, co-pays, dental, vision, counseling, and other care services.  Over the past 30+ years as I have been working with clients, I have seen firsthand how these costs are becoming an increasing burden to retirees as inflation in the healthcare industry is very much outpacing increases in incomes.

For many, chronic conditions like high blood pressure, high cholesterol, diabetes, obesity, heart disease, and auto-immune diseases are a big burden physically, mentally, and financially.  My story was typical of a lot of people I see.  Busy family life, high pressure jobs, and the stresses of life slowly add up.  Late in my 40’s, I was diagnosed with high blood pressure and started taking medication.  I thought I was in pretty good shape and didn’t give it much thought as my mom had high blood pressure all her adult life, and I thought it was hereditary.  As I got into my 50’s, my cholesterol and triglycerides started steadily increasing to unhealthy levels.  Like many, I ignored the slow decay of my physical and mental health.  Denial was strong.  I would get flashes of trying to stem the aging “tide” but would eventually fall back to poor exercise and eating habits.  There were always more important things to do than focusing on my health. Between feeling the aches and pains of nearing 60 years old and waking up to the knowledge of the effect my health would have on my retirement finances, I became acutely aware that I needed to seriously focus on my health.  My motivation of wanting to feel better physically and mentally was boosted by the fact that I wanted to use my retirement savings for better things than healthcare costs.

In late 2018, I got to work.  First, I did an inventory of my state of health.  To do this, I consulted with professionals, gathered tools and health data, and did a deep dive into educating myself about nutrition and mental wellness.  I also examined my consumption of food and alcohol, my utilization of exercise, and my stress levels and other facets of improving my emotional health.  Second, I set aside feelings of ego, guilt, and pride to create a realistic road map to improving my health.  One of the main things I learned right away is that there is no quick fix.  To reverse years of poor habits and choices, it takes a long period of time.  It definitely is a marathon and not a sprint, as to do it the right way involves lifestyle changes and not diets or boot camps.  

I’m eating less with mostly plant-based meals, exercising consistently, and addressing the stresses I face on many fronts.  It has been fabulous!  My energy levels are much higher, and I have a much more positive attitude about life in general.  For many years, I felt anxious about the state of my physical and mental health and that I couldn’t get the motivation to execute a good personal healthcare plan with consistency.  I’m glad the added boost of seeing improved health as a financial strategy has motivated me to create and execute the beginnings of a sound personal health plan.

We all live with the genetic lottery, and predicting our future health is difficult, but it would be ridiculous for me not to do everything in my power to live healthily and potentially not spend my hard-earned money on healthcare.  I encourage everyone to create and execute a health and wellness plan to feel great physically and mentally.  It also is a good financial strategy.