Showing posts with label HSA Account. Show all posts
Showing posts with label HSA Account. Show all posts

Sunday, June 23, 2019

3 Reasons You Should Opt in for an HSA Account

With the expenses associated with healthcare continuing to rise, you should be doing everything you can to maximize your savings wherever possible. While there are many things that you can be doing to protect your health and contribute to your overall well begging, you will still want to safeguard your finances against any injury or illness that can come your way. 

It seems that many people have shied away from Health Savings Accounts because of the restrictions placed on how you can use the money that it put into it. While that might be a legitimate concern, consider the following three reasons why you should opt in for an HSA account.

You Can Invest Your HSA

This is an advantage that many people do not know about, but you can actually invest the money in your HSA. While most people just choose the default choice of putting the money in a low savings account, you can actually choose to put the money in a mutual fund if you so desire. 

The money in there can roll over year after year, giving you a similar investment effect that would be achieved by a Roth IRA or 401(k) account.

You Can Make Tax Free Withdrawals from Your HSA

Not only do you receive a tax deduction upon contributing to a Health Savings Account, but you will also enjoy the benefit of being able to make tax free withdrawals when the time comes. 

This makes it a unique type of investment account in that it becomes triple tax free. While we all know that paying taxes are a necessary part of life, it is nice to have an investment where we get to avoid the component of our finances for just a bit longer.

Save Your Receipts

The thought that you must make withdrawals in the same year that you make contributions is simply not true. In fact, you can save receipts from health related expenditures like dental crowns or contact lenses and then make withdrawals from the account in future years when you need the money. 

Just remember that all money you take out of your HSA must be for health related expenses. Beyond that, the timing is up to you.

This is just the tip of the iceberg. There are many more reasons why you should contribute to an HSA, such as the peace of mind that comes with knowing you have money available in the event anyone in your family suddenly becomes injured or ill. It is a type of forced savings account that can really pay dividends when the time comes.

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