Retirement Uses for Your Health Savings Account (HSA)
You know a health savings account (HSA) helps pay for out-of-pocket medical costs, but it may surprise you to learn that this tax-advantaged account could be a superior retirement savings vehicle, too. It has become ingrained in us that we should max out our 401(k) or other workplace defined contribution plan as the best way to save for retirement. This is certainly good advice. But should those health-cost savings plans also be maxed out in a similar fashion? Here is a look at what these accounts are, who can open one, and how to make the best use of an HSA for your retirement if you are fortunate enough to have one.
Key Takeaways
The high-deductible health plan you need to qualify for a health savings account (HSA) may be more budget-friendly than it seems because premiums are so low.
Unlike a flexible spending account, your HSA money is yours forever, and it’s portable.
You can contribute to an HSA until you enroll in Medicare, even when you’re not working.
Invest your HSA money; don’t just leave it in a savings account.
Keep receipts for unreimbursed medical expenses since you can use them to get tax-free funds from your HSA—even years after you incurred the expenses.