Medical care and insurance aren’t getting any cheaper. That’s why it’s important to use every tool possible to save money and credit card debt. A Health Savings Account is one such tool. Learn about some of the money saving HSA benefits as you look towards the new year.
What Are Some HSA Benefits?
A Health Savings Account is a fund that can build over time to pay for qualified medical expenses. According to U.S. News, “HSAs were established under the Medicare Modernization Act of 2003 and are available to people covered by high-deductible health plans.” Each year, the owner contributes money within the maximum amount allowed. As the year goes forward, money is withdrawn to cover co-pays, co-insurance and other costs.
Fortunately, HSA benefits extend beyond simply helping Americans with saving money for their medical care. There are some serious money saving qualities. Here is a look into some of the advantages of using a Health Savings Account.
3 HSA Benefits
First, HSA contributions are considered pre-tax when they are taken from your paycheck. How cool is that?! This is also a great way to stay committed to contributing money to the HSA. It can be hard to sideline savings when other financial needs arise. Payroll deductions are really handy when you struggle to save.
Secondly, the money in the account carries over from year to year. For example, maybe you only needed $4,500 of the $6,000 for 2018. That means your account will carry the $1,500 over to the next year. This is different than an FSA (Flexible Spending Account) which has a limit.
Finally, HSA benefits get better as time goes on. The money in the account grows interest. And this interest is free of taxes as well. Additionally, an HSA can be an immense asset when planning for healthcare in retirement. As inflation rises, the money in the account is already worth more just by time passing. Withdraws from the account are tax-free and can save seniors lots of money. Starting to save early and often is another way to keep seniors on track in retirement.
If you have the opportunity to have an HSA, take full advantage!