3 Things 5-11-26

Thing One

The Retirement Account Almost Nobody Talks About

When most people think about building wealth, they think about their 401(k). Maybe an IRA. Maybe a brokerage account. Very few people think about their HSA. And that’s too bad because the Health Savings Account may be the single most tax-advantaged account available in America today. Not one of the best, the best. Here’s why:

Imagine a 30-year-old making $80,000 a year. They’re healthy, working hard, trying to build toward the future. Like most people, they probably think of healthcare expenses as something to deal with in the moment. Doctor visit? Swipe the HSA card. Prescription? Use the HSA. That’s what most people do.

But some people, the ones who see the HSA as an investment vehicle, use it very differently. Instead of spending the money each year, they pay current medical expenses out of pocket and allow the HSA to remain invested. They treat it less like a healthcare account and more like a stealth retirement account.

Why? Because no other account gets the same tax treatment.

A traditional 401(k) gives you a tax deduction upfront, but you pay taxes later.

A Roth IRA grows tax-free, but you don’t get the deduction today.

A brokerage account gives you no real tax shelter at all.

But the HSA does something unique. The contribution is tax deductible.The growth is tax-free.And withdrawals for qualified medical expenses are tax-free too. That’s the triple tax advantage — and no other account offers all three.

Now let’s go back to that 30-year-old earning $80,000 annually. Suppose they max out their HSA every year. Today, that’s roughly $4,300 annually for an individual plan. Let’s also assume the money is invested and earns an average long-term return of 7% annually. If they consistently made those contributions every year from age 30 through age 65, the account would grow to approximately $594,213.

Think about that for a moment:

Almost $600,000.

Potentially never taxed.

Built from an account most people use to reimburse prescriptions and urgent care visits.

That’s the power of long-term compounding combined with tax efficiency. And here’s the part many people don’t realize: You do not have to reimburse yourself immediately for medical expenses.

Many disciplined savers simply keep records and receipts for qualified healthcare expenses they paid out of pocket years earlier. Meanwhile, the HSA stays invested and continues compounding uninterrupted. Decades later, they can still reimburse themselves tax-free from the account if they choose. In other words, every dollar left untouched inside the HSA keeps working.

And that matters because healthcare is likely to become one of the largest expenses people face in retirement. Many retirees will spend hundreds of thousands of dollars on healthcare throughout their lifetime. The HSA was specifically designed for this problem. Then there’s another hidden benefit after age 65. If withdrawals are used for medical expenses, they remain completely tax-free.

But even if they are not used for healthcare, the account essentially behaves like a traditional IRA — meaning withdrawals are simply taxed as ordinary income without penalty. That flexibility makes the account even more valuable.

The reality is that many people overlook the HSA because the name sounds small.

“Health Savings Account” doesn’t exactly sound like a powerful wealth-building tool.

But for disciplined investors willing to think long term, it could quietly become one of the most important accounts they ever own.

Thing Two  

Is the “100 Minus Your Age” Rule Still Good Advice?

For decades, investors have heard a simple rule for investing:

Take 100 minus your age. The result is supposed to represent the percentage of your portfolio that should be invested in stocks.

So if you’re 30 years old, the rule suggests 70% stocks and 30% bonds. If you’re 60, it suggests 40% stocks and 60% bonds. The logic behind it is straightforward. As you age, you should gradually become more conservative because you have less time to recover from major market declines.

The rule is useful as a rough starting framework, but it becomes dangerous when people treat it like universal truth. Because investing is not just about age. It’s about risk tolerance, income stability, time horizon, emotional discipline, spending needs, and opportunity cost.

That last one is the part many people overlook.

Historically, stocks have significantly outperformed bonds over long periods of time. That higher return comes with volatility, but volatility is often the price investors pay for long-term growth. The problem with becoming overly conservative too early is that inflation continues working against you the entire time.

Imagine two 35-year-old investors:

• Both invest $10,000 annually for 30 years.

• Investor A earns 10% annually.

• Investor B (the strict rule of 100 adherent) earns 6% annually. 

At first, the difference feels small. But compounding magnifies small differences dramatically over time. After 30 years, the investor earning 10% annually would accumulate approximately $1.64 million. The investor earning 6% annually would accumulate approximately $790,000. That is a difference of roughly $850,000. Same annual contribution. Same time horizon. Completely different outcome. That’s the opportunity cost of being overly conservative for too long.

Of course, higher expected returns also come with higher volatility and larger short-term declines. That risk is real.

But over multi-decade time horizons, avoiding growth entirely can become its own form of financial risk.

This is where risk tolerance matters more than formulas.

Two investors can be the exact same age and require completely different allocations. One person may panic during a 20% decline and sell everything. Another may see it as a buying opportunity.

The mathematically “optimal” portfolio is useless if an investor cannot emotionally stick with it during difficult markets. A portfolio only works if you can stay invested through uncertainty.

And this is where blanket formulas often fail. The 100-minus-age rule assumes all investors experience risk the same way. They don’t. Another reason the old rule is harder to apply today is simple that people are living longer than ever before. Retirement is no longer necessarily a 15-year finish line. Someone retiring at 65 today may need their portfolio to last another 25-35 years. That changes the equation dramatically. In many cases, retirees still need meaningful stock exposure simply to outpace inflation and preserve purchasing power over decades.

That’s one reason newer versions of the rule evolved into:

• 110 minus your age

• 120 minus your age

The investing world itself quietly acknowledged that the original formula may have become too conservative. So is the rule valid? As a rough guideline, it's fine. But as a rigid investing strategy, probably not.

Good financial planning is rarely one-size-fits-all.

A 30-year-old with stable cash flow and high risk tolerance may reasonably invest very aggressively. A 30-year-old with unstable income and severe anxiety around market volatility may need a more balanced approach.

Rules like “100 minus your age” can provide a useful starting point, but they should never replace thoughtful financial planning and honest self-awareness.

Thing Three

Just A Thought  

“Even the best cooking pot will not produce food.” — African proverb