Health Savings Account
Great Ways to Save Money-Tax Free
So many people today are looking for ways to save money it’s amazing that very few people understand the advantages of a Health Savings Account. An HSA (Health Savings Account) is a tax-sheltered account that you own for the purpose of paying qualified medical expenses for yourself, spouse, and your dependents.
The HSA allows you to put money away in an account where it can grow tax free on a yearly basis. You have the opportunity to invest funds in interest bargaining accounts, mutual funds, and stocks, which all gains are tax free as well. Many people confuse the HSA with the Flexible Savings Account (FSA) in which all monies must be used during the calendar year of the contribution.
Having a Health Savings Account is a great way to save money for health related expenses before or after retirement. It’s a great solution for health insurance plans that don’t offer pregnancy or birth coverage since you can save for these events in your HSA. In addition, your monthly premiums are usually 20%-30% lower with an HSA.
Some of the great benefits by having a Health Savings Account are the following:
- Your HSA voluntary contributions are tax-deductible.
- Interest earned on your account is tax-free.
- Tax-free withdrawals may be made for qualified medical expenses.
- Unused funds and interest are carried over, without limit, from year to year.
- You own the HSA and it is yours to keep – even when you change plans or retire.