A Health Savings Account (HSA) is an individually owned, tax – advantaged account you can use for your current or future IRS qualified expenses.
If you have a qualified high-deductible health plan – either through your employer, your spouse or one you purchased yourself – chances are you can open a HSA.
- Contributions going into your HSA are not taxed.
- Interest earned on the funds in your HSA is tax-free.
- Any withdrawals for qualified medical expenses are also tax-free.
- There’s no deadline for using the money like there is with some other health accounts such as a Flexible Spending Account (FSA). Your HSA balance rolls over year after year and can keep growing.
- Your HSA money is always yours. You don’t lose your HSA if you get a new job or leave the workforce; you can take it with you.
You can let your HSA balance keep growing tax-free, year over year, and use it to help cover your health care costs in retirement, including Medicare premiums.