Question: RMSA account?
I tried searching on this topic but couldn't find anything. I think they are fairly new since a Google search didn't turn up much on them either.
My MegaCorp is starting to offer this RMSA (Retirement Medical Savings Acct) in addition to our 401k plan. They are designed as vehicles to specifically save for medical costs in retirement. Here are the main features:
1. Like the Roth IRA, your contributions are made after-tax and earnings are tax free after MegaCorp defined retirement age of 55.
2. Unlike the Roth, after age 55 the account can ONLY be used to fund qualified medical expenses. If you seperate from MegaCorp prior to age 55, your contributions can be used for COBRA premiums.
3. After retirement from MegaCorp at age 55 or later, they offer a high deductible health plan with guaranteed coverage, but 100% employee funded. So the RMSA withdrawals post-55 can cover the premiums for this policy (or a different policy if you chose).
4. MegaCorp gives you a $5k jump-start in the account; and matches 50 cents per dollar contributed, up to $1500. The catch is, if you seperate from MegaCorp prior to age 55 you forfeit MegaCorp's contributions (your contributions you get to keep).
Those are the main features I can think of. I'm 37 so I still have quite a few years to go until 55...what do you all think? Should I contribute to this RMSA account or not?