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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TLDR: An HSA account is a way to save money for medical expenses in a tax-advantaged way. You need a high-deductible health plan to open one. You can contribute up to a certain limit each year and use the money for various medical costs. You can also invest the money and keep it for the future.
An HSA account is a **health savings account** that lets you save money for medical expenses in a tax-advantaged way.
You can only open an HSA account if you have a **high-deductible health plan (HDHP)**, which is a type of health insurance that has a higher deductible than a regular plan.
You can contribute money to your HSA account from your paycheck or from other sources, up to a certain limit each year. For 2022, the limit is **$3,650** for an individual and **$7,300** for a family. If you are 55 or older, you can add an extra **$1,000** as a catch-up contribution.
The money in your HSA account is not taxed when you put it in, when it grows, or when you take it out for qualified medical expenses. This makes it **triple tax-advantaged**.
You can use your HSA account to pay for things like copays, prescriptions, dental care, vision care, and more. You can also use it for over-the-counter medications and some other health products without a prescription.
You can invest the money in your HSA account in mutual funds or other options, depending on your provider. This can help your money grow over time and provide more savings for the future.
The money in your HSA account is yours to keep. It does not expire or go away at the end of the year. You can also take it with you if you change jobs or retire.
If you enroll in Medicare, you cannot contribute to your HSA account anymore, but you can still use the money for qualified medical expenses.
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