Exciting Trends in Tech

(Image credit: Guido Mieth)

published 18 February 2019

Ryan: Are you up on cutting edge trends in technology? Yeah, us neither. The Kiplinger Letter tech guru John Miley, is plugged in, however, and he shares the latest and greatest in all the tech you use in our main segment. On today's show, I fill Sandy in on federal holiday sales deals, and Sandy explains to me how health savings accounts work. That's all ahead on this episode of Your Money's Worth. Stick around. Welcome to Your Money's Worth. I'm Kiplinger staff writer Ryan Ermey, joined as always by senior editor Sandy Block. How you are, Sandy?

Ryan: This episode is slated to come out on President's Day, which it gave me an idea. I was for years the writer of the financial calendar that goes in the beginning of every issue of Kiplinger's magazine, which by the way the most thankless story in the magazine. It's a ton of reporting and a thumb nails worth of space. It gave me the idea that we have all of these federal holidays that all come with their own flavor of sales, so I thought we could...

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Ryan: It's always in December. It's usually the 15th through the 18th and it's not only big box places, but lots of small retailers, even Etsy people sign up and they will guarantee you free shipping by Christmas if you order on Free Shipping Day. Museum Day Live, a really popular one that the Smithsonian puts on. That's in September, a day that it's free admission to museums all over the country. The last one that I really like coming up here in May, May the 4th this year, it's always the first Saturday in May.

Ryan: May, it's another nerdy tie in. It's Free Comic Book Day, which I think is a really, really cool promotion, because they have all of these respected comic book publishers put out all these different ones that you can get for free at comic book stores across the country. For people whose kids aren't that keen on ready, comic books can be a really, really great entree into that world. I have nieces and nephews ... I loved reading as a kid. I think it enriches your life and comic books can be a way for kids to get into that.

John: It's somewhat smart. It has GPS. It will show me texts and things like that. I think one of the biggest things is smart watches having cellular coverage, so you can get cell service without your smart phone. You don't need to pair it with that. Apple was a leader on that a little bit. It's still somewhat new, maybe a couple years old by now. It's easy to get jaded in tech coverage, but I still think it's pretty cool that you can make calls and texts on your smart watch.

John: People can have very interesting and political discussions about whether it makes sense to raise the top marginal tax rate on rich people, but if you're going to have these conversations, you need to be clear on how that works. We're not going to tax 70% of anybody's income. I don't even think they do that in Sweden ... maybe they do, I don't know. It's important to understand this, because it helps you make decisions in your life. If you think that making more money will automatically trigger taxes on your entire income, you're going to be less likely to try and make more money. That's just not how it works.

John: Some of the ones for elder care I was looking at and I think that's about what they are, $100 to $200. They've cut the price initially, because you are paying a monthly fee. I've seen as low as $18 a month. You're paying for the data and the app that the care giver or the doctor or the nurse would have to get any texts, to get calls, to track a person if they would have Alzheimer's and you want to track a ... If they're wandering you could track fitness and movement. There's...

John: Phones have gotten more expensive, because that's been Apple's strategy as smart phone sales have plateaued, the market is mature, as they would say. They've kept pushing up the prices. Samsung has done it with their flagship phones that are packed with features as well. They said, "Let's get more profile out of each sale on this phone." It's worked fairly well. I think a little bit over 40% of Americans have iPhones, so a lot of people in the U.S. do have iPhones, but your phone, which is by industry standards downright ancient, that's more common.

Sandy: That's more than I want to spend for the phone. Are we beyond the days ... I remember when Apple would introduce a new smart phone and you'd see all these things on TV of these always young people lining up to get the new phone. Are people still doing that or have we gotten a little ... You mentioned that people are holding onto their phones longer. Is it harder to get people excited about the next smartphone?

John: I think it's harder to get people excited. They do ... You can trade in your phones. Apple's promoting that more to get a price discount. I think the features are less dazzling than they used to be for some phones. Speaking to your budget question, if you want to get an Android, there are some 200 to $300 Android phones that are fairly good. My wife has one. She doesn't, she's an Android customer, and those are pretty good. That's not a bad price for how important phones are in day to day life.

John: Yes. There's a lot of hype behind it, but it's certainly real. It's interesting that some of the marketing hype is overtaking it. It's a new technical standard, so the technical standards of the new cellular generation, so faster, more ubiquitous coverage, snappier connections, so more instant connections, which is useful for driverless cars and controlling remote machines and things like that.

John: Right. I expect it to be high prices. They're going to be marketing these heavily, because they haven't been upgrading as often. Phone companies seeing this, and cellular companies, a big opportunity to get people buying new phones and also using more data. The 5G coverage it's not going to cross the U.S. instantly. There will be pockets in major cities, denser suburbs, so even if you did get a 5G capable phone, it wouldn't work everywhere right away.

John: Yeah, that's the expectation is that it gets fast enough where you can do that. Verizon and AT&T have been launching home 5G internet and you buy an antennae, put it in your home, and it's wireless. You cut the broadband cord, but it doesn't get to your point of you still need cellular service, although I think you can roll it into one plan, but ultimately there definitely is a future where you just have that cell coverage and maybe you can tether it to your big screen TV and watch Netflix on your cell phone and stuff like that.

Ryan: Speaking of the future, and before we let you go, we wanted to get into some of the more Jetson-y stuff. This is what my ... Well, when my parents want to hear about tech, they want to hear about the Jetsons. My mom still always talks about whenever she Facetime's with my niece and nephew that Jane Jetson used to put on a face. You know what I'm talking about? She would hold it over her face. That's what my mother always said that she desires. One of the huge things that you mentioned, one of the enormous trends in tech is driverless cars. How close are we really?

John: Right. That would eliminate the cost of the person driving the car, but their expectations that these cars cost a lot of money. They're going to be packed with computers, laser scanning sensors, they have to have communication, antennae, lots of other stuff that's going to really up their price. Ride sharing definitely makes sense, because you can try to use the car more than once for one person.

John: I think it was an interesting ... I think they always thought of it as an experiment, but that ... Apple's looking at that type of, that's augmented reality, you can see the real world in front of you, you have digital images overlaid onto the real world. There's some expectations that Apple might want to come out with something as soon as 2021. Google is looking at these goggles. This fits in with 5G, because if you have better cellular coverage, you can wander around and get those images on there. Then, in the meantime, people are using more virtual reality goggles. It's gaining traction among gamers, hardcore type people. I think that next year could be a turning point. They've gotten pretty small, they've gotten more powerful. I think they've gotten over some of the early models that were big and expensive. Facebook owns the company Oculus. They've cut the price a lot, but they haven't spurred the excitement to go mainstream, but I think they're slow and steady.

John: A couple ideas. One would be if Facebook would want to roll that into social media. You're either chatting with friends or you're on social media but you're in a virtual world. I think it's also interesting when you can stream movies in virtual reality or you can watch NBA games and other sports games and feel like you're court side. That's more a 3D viewing of a live event or a concert or something like that. I think that could gain traction. It depends when some of the big companies would jump into this. Would Netflix push it? If Apple comes out with something that would really push it into the mainstream.

Sandy: We cover them a lot, Ryan, because right now more and more people are in high deductible health insurance accounts, either by choice or by necessity, because some employers only offer a high deductible plan. When you have a high deductible plan you have a lot of out-of-pocket costs before your insurance kicks in you usually have to spend a fair amount of money on co-pays, everything. A health savings account is the most effective way to deal with this, because basically you are allowed to put aside money in this account that is tax deferred, it grows tax free, and when you take it out you don't pay any taxes on it. We call that a triple tax play.

Sandy: Can't beat that. A lot of people get them confused with flexible savings accounts, which have been around for a long time, but they're so much better for a couple reasons. One is a lot of employers, because they want to encourage people to sign up for high deductible plans will see the accounts. They'll give you maybe $500 or $1,000 to start. You've got that money, free money. Don't want to pass that up. Even better than FSAs is there's no use it or lose it provision. With flexible savings accounts you have to use all the money by the end of the year or sometimes by March 15. I remember one Christmas going into a Walgreens because I had a couple hundred bucks left in my flex account and I'm buying blood pressure things and band aids and stuff that was covered.

Sandy: But with the health savings account you don't have to do that. You can roll whatever you don't use sits there and continues to grow until you need it. You can actually build up a pretty nice account. If you leave you can take it with you. A lot of people invest in these through their employers, but if you work for yourself or you buy your own health insurance you can get your own HSA through an HSA provider. There are a lot of options, a lot of flexibility. Some savvy people suggest not using the money at all just letting it grow until you retire and then you've got this nice pot of tax free money you can use to pay one of the heftiest expenses for retirees is health care. You've built up this savings account. Even if you don't have the cash flow to do that, this is a great way to deal with what is a growing trend in healthcare, which is we are picking up more and more of the cost. We are expected to shop around for the best deal and shell out a lot of our own money before the insurance kicks in. Having this money be pre-tax lowers the amount that you're having to pay and it also is a great way to build up a fund for emergencies.

Sandy: Right, and I've, that's really worked out well for me, because what I've found is under the affordable care act most of the things that I go to the doctors for are check-ups and that doesn't count against your deductible. That's basically covered by your insurance with no co-pay or counted against your deductible. Say you only go to the doctor for a check-up and maybe if you're a woman, a mammogram. Then, you could end the year with no medical expenses, but that's okay, because your HSA is sitting there growing, waiting for you until you do have medical expenses. That's what I really like about this type of account. The other nice thing about an HSA, which wasn't true with an FSA is that you can invest this money. Now, if you think you're going to need the money I would put it in a bank account, but most HSA's offer several options. If you think you want to grow this money, you can even put it in mutual funds. You have a lot more choices of how to use the money and the last thing I'll say is as an administrative aside, when you spend money on covered expenses, basically you don't have to go through your HR department and get them to approve that it's covered by your account. You spend the money. Then, you submit it to your HSA. They cover it. When you file your tax return, you basically square up.

Sandy: It's a lot easier to manage than an FSA, which runs the risk of your HR department saying, "Well, we're not sure that's covered." Or you have to wait to get your money back or whatever. I think they're a lot more manageable than flexible spending accounts. Again, going back to the idea that you can roll over money that you don't use and take it with you when you go makes it a really accessible way to deal with what everyone is dealing with, which is rising healthcare costs.

Sandy: Well, basically what this story is about is that as great as we think HSAs are, fees really vary. If you have high fees, they could really eat away at any investment returns or the amount that you put in. In this article we talk about the best way to find an HSA, where to look either if you have a plan through your employer, or even more importantly if you have to buy it yourself. Often times your employer provided plan will be the best option, but if you work for yourself and you're buying an HSA, we've got some good tips on where to find one that will give you the best deal.

Ryan: All right. Check it out, folks. That's it for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at podcast@kiplinger.com. If you like the show, please remember to rate, review, and subscribe to Your Money's Worth wherever you get your podcasts. Thanks for listening.

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Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.