Why It's Important to Be an Educated Consumer on the Healthcare System

The healthcare system is notoriously confusing to those who aren't familiar with medical procedures and terminology. In most cases, patients will accept provider recommendations without considering other options or asking relevant questions. With the high cost of healthcare, being a passive patient isn't the best approach. Here's why you should take steps to become a more educated consumer and take steps to be in control of your care.

Potential Cost Savings

The most challenging part of navigating the health care system is the costs. While your overall health and well-being should be the most significant factor for any healthcare decision, money will factor in at some point.

Providers typically don't think about the financial implications of treatment. Their goal is to help you get healthy, so costs are not a part of the equation for most recommendations. Instead of blindly accepting the first recommendations you hear, research to understand costs and how procedures will affect you financially. You may find a more affordable option that helps you steer clear of medical debt.

Mitigating Risks

Another thing to think about is the risks of treatment. Patients often focus too much on the benefits without weighing the potential risks. Here's where being an educated consumer makes a difference.

For example, say that you have the option of treatment A and treatment B. While treatment A might have a slight edge over the other option, it also comes with more extreme risks. Is that a wager you're willing to make for a negligible chance of better results?

Knowing What to Expect

Sometimes, treatment plans can provide excellent results. But in other cases, you might not get the results you expect. Not every procedure will eliminate issues or alleviate pain. They may even cause additional complications to arise.

As an educated consumer, you can weigh your options more realistically by understanding what to expect. It's about being realistic and managing your expectations without making assumptions based on quick provider recommendations.

Considering Alternatives

Finally, navigating the health care system involves learning about alternatives. Don't be afraid to get second opinions or explore other options. Let's look at back surgery as an example.

While back surgery is a viable option, it doesn't always provide outstanding results. There are many risks involved. As a passive patient, you might take those risks without considering options like physical therapy. Therapy takes longer to see results, but it has fewer risks, lower costs, and comparable outcomes.

Healthcare is not something you should treat passively. It's a big part of your life that impacts your well-being and financial health. Do your due diligence, ask questions, and consider all possible options.

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Consequences for Not Following the IRS 2022 Retirement Account Contributions Limits

An individual retirement account (IRA) is a strategic way to manage your money and prepare for the future. Traditional and Roth IRAs help you save up for retirement and grow a nice nest egg. However, contributing to retirement accounts can be tricky.

These tax-advantaged accounts have strict limitations and putting more money into the account than you are allowed to could lead to some penalties.

2022 Contribution Limits for Retirement Savings Account

Understanding contribution limits is paramount. Limits can change year after year, so you must stay on top of current allowances to avoid issues.

In 2022, the most you can contribute to a Roth and traditional IRA is $6,000. The only exception is if you're over 50 years old. In that case, you can contribute up to $7,000.

Those figures reflect the combined total you can put into these accounts. That means individuals with both Roth and traditional IRAs must split the difference between the accounts.

There are additional limitations to be wary of when planning contributions. For Roth IRA, you can only contribute if you make under an adjusted gross income threshold. Making contributions when you made more than that threshold is an excess contribution.

The Penalties for Excess Contributions

Anything more than the stated limits is an excess contribution. So, what happens when you go above the 2022 contribution limits for retirement savings account?

All ineligible contributions are subject to a six percent penalty. You'll have to pay six percent on anything above the annual limit. Typically, you pay the penalty when you file income taxes.

It's important to address the issue as quickly as possible. The penalty applies every year the extra contributions remain in your account.

There are a few ways to deal with the extra funds. You can withdraw it, apply it to next year, or file an amended tax return. Remember that an additional 10 percent penalty will apply if you can't remove the excess as a qualified distribution.

The penalties for not following contribution limits can be steep. If you notice issues, fix them as soon as possible to minimize unnecessary fees.

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