1. What is an HSA?
  2. How to Qualify to Contribute to an HSA
  3. How Much Should You Contribute to an HSA?
  4. How and When to Use Your HSA Funds
  5. HSAs, FSAs and Limited-Purpose FSAs
  6. HSA Strategies for Different Life Stages
  7. Using Your HSA as a Retirement Savings Tool
  8. The Bottom Line

health savings account, or HSA, is a special type of account that you can use to make healthcare expenses more affordable. You contribute pre-tax dollars to your account, and withdrawals aren’t taxed either, as long as you use the money for qualified medical expenses. What’s more, you can place your HSA balance in an interest-bearing savings account or even invest it, and any returns you earn won’t be taxed, either.

The Tax Advantage

This combination of cost-saving features is why you’ll read that HSAs have a triple tax advantage. It’s a unique characteristic that can help you accumulate money faster than you would in a: 

  •  Roth IRA, where your contributions are taxable but investment returns and withdrawals aren’t taxed 
  • traditional IRA, where your contributions come from pre-tax dollars and investment returns aren’t taxed but withdrawals are taxable; o
  • regular savings or investment account, where your contributions come from after-tax dollars and your investment earnings are taxed every year, too.

What’s the catch? There are two. First, you can only use an HSA if you have a high-deductible health insurance plan (HDHP). And second, you can  only contribute a limited amount to your HSA each year.

The good news is that when you pick an HDHP, the premiums will be lower than if you chose an equivalent insurance plan with a lower deductible. If your healthcare expenses for the year are low, you can save money this way.

Additional Benefits

Another benefit of HSAs is that they are portable. If you change jobs, you can take your HSA with you; it isn’t tied to your employer. You can also carry over any unused balance from one year to the next; your contributions aren’t “use it or lose it.” You can contribute to an HSA through payroll deductions or from your bank account. Someone else, like an employer or relative, can also contribute to your HSA. 

In this tutorial, we’ll cover all the basic information you need to know about HSAs, such as how to qualify, how much to contribute, how to use your contributions and how an HSA can benefit you in different life stages. We’ll make sure you know the difference between HSAs and the similarly named FSAs, or flexible spending accounts  (aka flexible spending arrangements). We’ll also provide some advanced tips on how to make the most of your HSA by using it as a retirement savings tool.

How to Qualify to Contribute to an HSA
Related Articles
  1. Retirement

    Your HSA: A Triple Threat Investment Tool

    Thanks to its unique tax advantages, a Health Savings Account may be the best retirement option you never knew you had.
  2. Insurance

    Don't Overlook HSAs During Open Enrollment

    Health savings accounts shouldn't be overlooked during open enrollment. Here's why and how they work.
  3. Managing Wealth

    Pros And Cons Of A Health Savings Account (HSA)

    Health Savings Accounts let you pay health care costs with pre-tax dollars.
  4. Insurance

    7 Common Questions and Answers About HSAs

    Knowing the answers to these seven health savings account questions can help you use yours properly.
  5. Insurance

    How to Maximize a Health Savings Account

    Health Savings Accounts have many benefits. Here's how to make the most of them.
  6. Financial Advisor

    Forget 401(k)s: Put Your Next Savings Dollar Here

    A 401(k) might be the post popular option for retirement savings, but there is another lesser-known option that may make sense for many.
  7. Insurance

    Are Health Savings Accounts Useful in Retirement?

    When saving for retirement, an HSA be a tax-efficient vehicle for future healthcare expenses.
  8. Financial Advisor

    How to Convince Savers to Put More into HSAs

    HSAs represent a fourth leg on the retirement planning stool. Here's what employees and employers need to know.
Frequently Asked Questions
  1. Can stocks be traded on more than one exchange?

    A stock can trade on any exchange on which it is listed. If it chooses to do so, a company can list its shares on more than ...
  2. Treasury Bond vs Treasury Note vs Treasury Bill

    Understand the types of securities the government issues and learn the difference between Treasury notes (T-notes), Treasury ...
  3. MIS (Management Information System) vs. IT (Information Technology)

    Find out about the relationships and the primary differences and similarities between management information systems (MIS) ...
  4. What is a DRIP?

    "DRIP" is an acronym for dividend reinvestment plan, but the word also describes the way the plan works as investments grow ...
Trading Center