I’m in the process of enrolling benefits for a new job. Can someone explain an hsa account and how that money can be invested? Everything I have read says to max out your hsa and invest the unused over portion. How does that work?
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An HSA is a health savings account. It’s a special bank account that you can put money in before taxes, saving you a lot of money compared to normal savings accounts. The catch is that the money can only be used on medical expenses. The assumption is that people will spend a lot more on medical issues later in life, so by maxing out your HSA while you’re young, it allows you to maximize your tax-free benefit and avoid paying for medical care with taxed money in the future. With an HSA, the money is always there, so if you don’t use it when you’re younger it will still be waiting when you retire.
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