Health Savings Account – The Truth About HSAs

With the rising costs of health insurance and medical premiums, a Health Savings Account (HSA) may difficult to fund. In this post, I will spell out exactly what is an HSA and if you should add it to your already thin budget. 

What Exactly Is An HSA?

A Health Savings Account (HSA) is a vehicle that allows you to use tax-free money to pay for eligible medical expenses. Think of it as a separate saving account that you can use for medical related costs.

What’s The Catch?

In order to use an HSA, you need to be signed up for a high deductible health plan. You are required to pay out of pocket for all medical expenses until you hit a predetermined amount based on your insurance company.

The Benefits Of An HSA

Unlike a traditional saving account, you can invest your HSA funds in mutual funds while they sit in the HSA. That means your HSA can also work as a tax-sheltered investment fund!

As your money continues to grow in your HSA, it can help you out down the road in retirement. For instance, if you reach the age of 65 and still have money in your HSA, you can draw from the account like a regular IRA. 

Use Your HSA For Retirement!

Health Savings Accounts are very versatile because you can use them for a wide array of medical items. They can be used for office visits and co-pays to include dental, vision, and medical.  

Medical Expenses You Can Use Your HSA For

When you set up an HSA, it belongs to you and you alone. If you change job, medical plans, etc. the HSA stays with you and you can continue to use the money it in.  

Health Saving Account Ownership

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