“The HSA is the only account that you do not pay tax on the money before you put it in, while it is growing, and when you take it out IF it is used for healthcare. Triple tax trifecta!”
Let’s say you are enrolled in a high-deductible health insurance plan that is “Health Saving Account (HSA) eligible”. Do you know what that means? Most people don’t according to the 2018 Workplace Benefits Report. HSA’s are often confused with flexible spending accounts (FSA), but the two differ significantly. HSA’s have distinct tax advantages and we feel they are an underutilized retirement savings tool.
Want to know if an HSA is something you should take advantage of? Give us a call, 865-240-2292.
Benefits of a Health Savings Account (HSA)
▷▷▷ Contributions are either pre-tax (if through your employer) or tax-deductible (if you opened your own account).
▷▷▷ Interest, or other earnings, on the money in the account is tax free.
▷▷▷ You don’t pay taxes on withdrawals if they are used for qualified medical expenses.
▷▷▷ The money can be invested in mutual funds, stocks and other investment tools, allowing for potential gains.
▷▷▷ Additionally, the funds never expire; the balance rolls over from year to year building value over time.
Want to dig deeper? Here are a few articles for further reading.
● HealthCare.gov High Deductible Health Plan Limits
● What is an HSA?
● Health Savings Accounts: Advantages and Disadvantages
● Health Savings Accounts Are a Misunderstood Retirement Savings Tool. Here’s How to Use Them.