Anytime I try to do my benefits the description isn’t helpful in explaining why it’s such a good investment move, aside from stating the obvious that it saves money incase you need it. Do I have to invest it? Or do you just let it sit? I’m confused
In: Economics
Let’s say I’m taxed 10% on my income. If I make $5,000 in a month, I will be taxed $500. An HSA contribution is tax-free. If I contribute $500 to my HSA, my income that will be taxed will be $4500, so my tax will be $450 instead of $500. I can use that money in the HSA to pay for medical bills. I can also throw the money in the HSA into the stock market, let it grow, and withdraw it tax-free.
Tldr: contributing to an HSA lowers your taxes. The HSA can be used to pay medical expenses (that you would have paid for anyway). It can also be thrown into the stock market, grow, and be withdrawn tax-free.
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