HSA: The Triple Tax Advantage You're Missing

Health Savings Accounts (HSAs) offer a unique triple tax advantage that makes them one of the best savings vehicles available.

The Triple Tax Advantage

1. Tax-deductible contributions: Reduce your taxable income
2. Tax-free growth: Investments grow without taxation
3. Tax-free withdrawals: For qualified medical expenses

2025 HSA Limits

• Individual coverage: $4,150
• Family coverage: $8,300
• Catch-up contribution (55+): Additional $1,000

Eligibility Requirements

• Must have a High Deductible Health Plan (HDHP)
• Cannot be covered by other health insurance
• Cannot be enrolled in Medicare
• Cannot be claimed as a dependent

HSA as a Retirement Account

After age 65, you can withdraw HSA funds for any purpose without penalty (though non-medical withdrawals are taxed as income). This makes HSAs a powerful retirement savings tool.

Investment Strategies

• Keep 1-2 years of deductible in cash
• Invest the rest for long-term growth
• Save receipts for future reimbursement
• Let the account grow tax-free

Common HSA Mistakes

• Not maximizing contributions
• Using HSA funds immediately instead of investing
• Not keeping receipts for future reimbursement
• Choosing an HSA with high fees