7 Reasons Why Your HSA Just Might Become Your New Favorite Way To Save Money

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A big part of adulting is saving, which I think most of us will admit is a little hard to do. But, a health savings account (HSA) is like a hidden gem of cash conservation that not as many people take advantage of.


An HSA is an investment account that you or your employer put money in to cover your medical expenses and qualified health care costs. The account is tax-free, and it grows over time. Sure, it may not be as glamorous-sounding as a high-yield savings account or a Roth IRA, but it’s a personal savings account you can use for future retirement costs.

I spoke with financial experts about what makes HSAs so beneficial. Here are seven reasons why it’s one of the best ways to save for your future.


The account is a wealth of tax benefits. For example, the money you withdraw is tax-free (unlike withdrawals from almost everything else — I’m looking at you, 401(k) account).


According to Charles H. Thomas III, a certified financial planner and founder of Intrepid Eagle Finance, there is no other account that offers the triple tax advantage of an HSA. Yes, you read that right. The money you put in your HSA is tax-free. Not only do you receive a deduction for putting money into the account, but you also won’t pay taxes on the interest it accrues. Just make sure any withdrawals are used for qualifying medical purchases to really cash-in on that tax exemption.


You’ll be reimbursed for the money you spend on health-related items — down to the last cent. Just pull up with your receipts!


The money you spend on out-of-pocket expenses can be returned to you using your HSA. Just be sure to save all your receipts from medical expenses to qualify for a ~tax-free~ reimbursement.

You must request reimbursement through your HSA bank custodian or HSA administrator. Every company has their own process, but as long as you have receipts, it’ll be a straight shot. This HSA guide has additional info so you can learn more (just scroll down to the section on reimbursement).


Like a bestie, your HSA wants you to grow, and in this case, we’re talking about the money you put into it. Thankfully, it doesn’t come with any conditions that make saving harder than it already is.


“The earlier you invest your money into an HSA, the better,” said Ben Reynolds, CEO of Sure Dividend, a platform that helps users invest in high-dividend stocks. It’ll have lots of time to grow as the compound interest increases your savings. Even a small contribution can benefit you in the long run.


An HSA doesn’t bully you into using your money by the end of the year — all the money you save rolls over.

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There’s no need to worry about a “use it or lose it” policy or unused funds going to waste when working with an HSA. The funds in this personal savings account roll over from year to year, which allows you to maximize your annual HSA contributions.


The contribution limits are so huge that you won’t feel restricted by how much you can save toward the account.

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Before we get into contributions, I just wanted to quickly explain what a deductible is because it can sound kind of confusing. A deductible is the out-of-pocket amount an individual must spend before their insurance company covers any costs. So if your deductible is $1,400, this means that you must spend $1,400 on a medical visit or procedure before the insurance company will chip in.

This year, if you’re an individual who has a deductible of at least $1,400, you can put $3,550 into your HSA. The “maximum annual HSA contribution limit gives HSA holders a lot of room [to save more money],” said Amy O’Meara Chambers, Chief Operating Officer and co-founder of HealthBridge Financial, Inc.

You can also just save the equivalent of your deductible in your HSA and use it to pay for medical costs (so you don’t feel like you’re actually paying out of pocket before your insurance picks up the tab).

BTW, here’s a helpful guide to learn more about HSA contribution limits.


Like your cell phone, this account is portable, which makes keeping your savings way less of a headache if you’re bouncing from job to job.


I’m so here for the flexibility. Even if you switch jobs or go into business for yourself, your HSA isn’t going anywhere. Let’s say you leave a job that offers the HSA benefit. Luckily, the account can move with you and stay under your name no matter where you go, which is ideal if you’re still figuring things out. You are responsible for running your account and no one (not even your employer) can take those funds away from you.


And, you know what’s better than saving money? Making money! HSA funds can be invested, which puts even more cash into your savings.


Not only is your HSA a money-saving tool, but it’s also a money-making resource. Investing your HSA capital in mutual funds could help you earn money you don’t have to pay taxes on. Depending on your goals, you might want to chat with a financial planner to figure out how to best allocate your money.

If this sounds like music to your ears (and bank account), check out more of our personal finance posts.


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