Why You Need an HSA: The Ultimate Healthcare Savings Tool 

In this MoneyNav video, we’re exploring Health Savings Accounts (HSAs) – a fantastic tool for anyone looking to save on taxes and plan for future medical expenses. Whether you're new to HSAs or looking to maximize your benefits, this video is for you. We'll explain what HSAs are, how they offer triple tax advantages and their incredible flexibility. You'll learn how to qualify, invest, and use these funds for a variety of healthcare costs. For the latest contribution limits, go here.  

Video Transcript:  

Hi friends! Today, we’re going to talk about one of my favorite investment accounts – the Health Savings Account, or HSA. If you like saving money on taxes and investing for your future, this video is for you.   

So, what's an HSA? It's a special savings & investment account designed to help pay for medical expenses. The best part? It’s triple tax-free! The money you put into the account goes in pre-tax, it grows tax-free, and you can take money out for qualified medical expenses without paying taxes on the distributions. There is no other account like it that allows you to avoid paying taxes on the money – ever – if you use it properly.   

To be eligible to contribute to an HSA, you must be on a high-deductible health plan, or HDHP. These plans typically have lower monthly premiums but higher deductibles. One common strategy is to take the money that you save by having a lower premium and contribute the difference to your HSA – so if you do have to pay for some healthcare costs you can take it out of your HSA tax-free.   

Another benefit of the HSAs is its versatility. Unlike Flexible Spending Accounts or FSAs, your HSA funds roll over year after year. They are not "use it or lose it" and you can take them with you when you change employers. This means you can keep saving those funds for future healthcare expenses, including costs in retirement. To supercharge your HSA, you can invest your balance just like you invest in your 401(k), 403(b), or TSP.   

And you can use your HSA for a wide range of medical expenses—doctor visits, medications, medical equipment, dental, and vision care for you, your spouse, and any dependents. When you reach age 65, you can use your HSA funds for non-medical expenses without penalty. You’ll just pay income tax on those, like a traditional IRA. The IRS sets the contribution limits for HSAs each year. Check out the linked article for this year’s contribution limits.  

To summarize, HSAs are a flexible, tax-advantaged way to save for medical expenses now and in the future. Take some time to explore your HSA options and see how it can help you manage healthcare costs more effectively. If you have any questions feel free to reach out. Take care and happy saving!