Top 5 Reasons to Be Thankful for Your HSA Funds

It’s late November, and that means the holiday season is coming at full speed. At this time of year, life can feel busier than ever, but Thanksgiving Day gives us a chance to stop for a moment of reflection. While you are considering all that you are grateful for this Thanksgiving, don’t forget your health savings account (HSA)!

For anyone enrolled in a high-deductible health plan (HDHP), HSA funds provide a way to offset health care costs. This savings account rolls over year to year by allowing you to set aside tax-free dollars from your earnings to pay for eligible health-related products and services. What makes HSAs special is that they function like a 401(k) for your health, meaning you can use it as a tax-free savings account, invest the money to help it grow, and cover health care costs at any time, even in retirement.

This is only the tip of the iceberg in terms of benefits your HSA offers, so these are our top five reasons to be thankful for your HSA!

1

You can use your HSA funds to stock your medicine cabinet.

There are thousands of eligible over-the-counter medications, health support devices, and pain relievers you can spend HSA dollars on to stock your medicine cabinet. Cold and flu season starts in November and runs through March, so it’s to your benefit to be prepared for it with medications and other products that can ease uncomfortable symptoms or boost immunity. Many of these products are HSA-eligible expenses, so you can use your tax-free dollars to prepare for the winter ahead while saving money. You might also consider investing in some antacids while you’re at it—just in case you need some relief after second helpings and a slice of pie (or three) during Thanksgiving dinner!

2

You can pay for medical bills of loved ones with HSA funds.

You can also use HSA dollars for the health care expenses of a spouse and any dependents you claim as tax exemptions, like your children, step-children, and foster children. Your HSA tax-free dollars can offset the cost of your family’s prescriptions, doctor appointments, vaccines, surgeries, and thousands of other eligible services and products they may need to stay healthy. Knowing you can take care of your loved ones, even if they aren’t covered under your health insurance plan, is certainly a reason to give thanks for your HSA.

3

Your HSA gives you triple-tax-advantaged savings.

Unlike any other retirement savings account, the HSA is triple-tax advantaged. This means you save on taxes in the following ways to keep your hard-earned money in your pocket:

You don’t pay taxes on the contributions you make to your HSA funds, which reduces your overall taxable income, saving you money.
You don’t pay taxes on the earnings your HSA account accrues as it grows throughout your career and through investments and dividends.
You don’t pay taxes on the money you withdraw from your HSA to pay for qualified medical expenses for yourself or your dependents.You may feel grateful knowing that your HSA is designed to let you keep all your hard-earned cash for investing back into your most precious asset of all: good health!

4

Your HSA is a powerful investment tool.

Because you don’t pay taxes on your HSA contributions, investments, or eligible withdrawals, you can potentially save a lot of money to cover your medical costs in retirement. Many people don’t realize how much they should be setting aside just for medical spending in retirement, but with HSAs, saving is made simple. You can grow HSA funds the same way you would a 401(k) by investing your HSA dollars in mutual funds, stocks, bonds, and certificates of deposit. By investing HSA money, you are investing in a healthy future. You can give thanks for the peace of mind that comes with knowing that you will be ready for retirement with your HSA.

5

Your HSA will always be there for you.

Your HSA will travel with you throughout your career and into your retirement. Every year, the money you invest in your HSA account rolls over to the next, and even if you leave the company you opened the account with, or change health plants, your HSA funds stay with you. That means that if you start investing in your HSA account early, you can save a healthy sum of money to pay for medical costs at any point in your life. You can be thankful that your HSA will always be there for you when you need it!