Health savings accounts (HSAs) were intended to be used to help pay for medical expenses. But they’re actually the best retirement account in existence. Unlike all other tax-advantaged accounts, they provide a triple tax benefit:
1.
Tax-deductible contributions
2.
Tax-free growth inside the HSA
3.
Tax-free withdrawals when used for medical expenses
Limits
If you withdraw your money on or after the date you turn age 65 for non-medical expenses, you pay regular income tax on the money, the same as for a traditional IRA.
Non-medical withdrawals before age 65 are subject to a 20 percent penalty, so don’t do them.
High Deductible Health Insurance
Your HSA must be paired with a high deductible health insurance plan, which may be provided by your employer or obtained on your own. HSAs work especially well when paired with high deductible Obamacare plans.
Treat It as a Retirement Plan
You should always fully fund your HSA each year until you enroll in Medicare and ideally take few or no distributions. Remember ... Log in to view full article.
