Do you have an HSA? If you don’t, consider getting one

Health Savings Accounts (HSAs) are financial tools that often fly under the radar 🤫 There is SO much to say about HSAs! 👏 And SO few people actually know about the hidden benefits 👀 

Literally all you have to do is go see your friendly neighborhood CPA or personal finance expert and say “HSA” and let them ramble on all this “super retirement account”📢 So let’s start with the basics.

What is an HSA?

A Health Savings Account, commonly referred to as an HSA, is a tax-advantaged savings account designed to help individuals and families with high-deductible health plans (HDHPs) save money for qualified medical expenses. 🤑 It offers a unique combination of tax benefits, flexibility, and accessibility that can contribute to your financial well-being.

The Benefits of an HSA:

1. Tax Advantages:

HSAs offer a triple tax advantage 😱 Contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free.

2. Savings for Medical Expenses:

HSAs allow you to set aside pre-tax dollars to cover medical costs not covered by your insurance plan. 🩺🥼 This can include deductibles, copayments, and a wide range of qualified medical expenses.

3. Portability:

Your HSA is yours to keep, even if you change jobs or health insurance plans. The funds roll over from year to year, allowing you to accumulate savings over time 💰

4. Investment Opportunities:

Some HSAs offer investment options 📈 This means your contributions can potentially grow over the years, providing a valuable resource for future healthcare needs.

How Does an HSA Work?

1.  Eligibility:

👉 All you have to do to qualify for an HSA is be on a high-deductible insurance plan (HDHP). (No medicaid/medicare/tricare — go to Healthcare.gov for more info) Your employer may offer this type of insurance, or you can choose an individual HDHP.

2. Contributions:

You, your employer, or both can contribute to your HSA. ✔️ The IRS sets annual contribution limits.

3. Tax Benefits:

Contributions to your HSA are tax-deductible, reducing your taxable income. Earnings within the HSA grow tax-free 🎉

4. Qualified Expenses:

You can use the funds in your HSA to pay for qualified medical expenses, including doctor visits, prescriptions, and even some dental and vision costs 🩻

Because you’ve chosen this plan, you’ll pay a lower monthly premium, but have a higher deductible. So, an HSA is a way the government helps you balance that out (you know, until we find a better solution to sort out our healthcare mess 😩).

🤫 However, there’s a secret trick rich people use to grow wealth using these accounts: don’t cash it out right away.

Instead, invest the money in that account (yes, you can do that) and let it grow over time 📈

🧾 Save all your medical receipts (therapy, medications, acupuncture, even lasik eye surgery!) and then cash out later when the money has grown from investing.

Of course, this is best for young & healthy individuals, so as always, do the math yourself & see what’s best for you!❤️‍🩹

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