What is an HSA?

A Health Savings Account (HSA) is the only type of account that allows you to potentially contribute money and never pay tax on it. Use it for medical expenses, and it’s 100% tax-free—even decades later.

“Health savings accounts are one of my favorite types of financial accounts. These accounts are the only types that allow you to potentially contribute money and never pay tax on it ever again. So you get a tax deduction in the year that you put money in a health savings account. You can actually invest the money just like you would in your 401(k) in your investment account and it can grow over time. And down the road when you pull the money out of that account, if you use it for qualified medical expenses, it can be 100% tax free. What’s even cooler is you can reimburse yourself for past medical expenses. So let’s say we’re 30 years down the road and you need some tax-free income, you can reimburse yourself for a medical expense that happened 20 or 30 years in the future.”