There may be nothing as exciting as maxing out a health savings account and racking up all the tax-free dollars. Here’s what you need to do to best leverage your HSA to grow wealth.
Our health savings accounts are among our favorite tools we use for growing wealth.
Unfortunately, most people have no idea how beneficial they are, or how to leverage them for maximum financial advantage.
We’re changing that with this episode of the show. Today, we explain everything you need to know about HSAs. In our conversation, we cover:
- What an HSA is (and isn’t)
- How it’s different than an FSA
- How health savings accounts let you get away with more tax advantages than any other account currently allows
- What you need to look at to determine if it makes sense to switch to a high deductable health plan
…and much more, including exactly what you need to do to turn this little account into a giant financial advantage.
Jump in here:
Further Reading and Useful Links
- Important footnote for this episode! The tax advantages and rules we discussed in this episode apply at the federal level… and for state taxes in all 48 states except California and New Jersey. CA and NJ do not recognize HSAs, and therefore, do not grant tax-preferential treatment to these accounts (or the earnings within them if you invest your money). For more information on this if you live in one of these states, this article from The Finance Buff has some really helpful info.
- Official definition of what is an HSA, from Healthcare.gov
- IRS guidelines around HSAs (and FSAs — it’s all on the same page so read carefully!) including what counts as “qualified medical expenses”
- More details on how we personally use HSAs in our own lives (especially when it comes to paying a medical bill out of pocket, rather than dipping into this savings fund)
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