To fund a health savings account, you must deposit pre-tax money from your paycheck. Read more: Shopping without a cash back credit card is just losing money - here's how to make sure you don’t miss out on serious savings What makes HSAs tax-advantaged? If you’re aged 55 and older, you’re allowed to put in an extra $1,000 in what’s called a “catch-up” contribution. For 2023, the minimum out-of-pocket deductibles for HDHPs increased to $1,500 for individuals and $3,000 for families - which is a sizable chunk of change before your insurance kicks in, hence the benefit of HSAs.Įffective January 2024, the contribution limit for individuals will be $4,150, while the limit for families will increase to $8,300. In order to open an HSA, you must be insured under a high-deductible health insurance plan (HDHP), which offers lower monthly premiums in exchange for a higher deductible. But if you’re strategic about how you use your HSA, it can also act as an extra money pot in your golden years. What is an HSA?Ī health savings account is a triple tax advantage account designed to help users put money aside for routine medical costs and possible health care emergencies down the road. “HSAs are the best accounts out there,” Marc Russell, financial coach and founder of BetterWallet, tweeted May 17 - and here’s how you can use your HSA to your advantage. It can also be used as an effective retirement savings vehicle - similar to a traditional 401(k) or IRA - especially when used for qualified medical expenses.Īnd now, the Internal Revenue Service has announced the largest-ever increase to HSA contributions, meaning Americans will be able to stash away even more money than ever in 2024.įollowing news of this boost, personal finance experts have turned to social media to share how savvy investors can use a lesser-known feature of HSAs to create a tax-free emergency fund. You could be the landlord of Walmart, Whole Foods and CVS (and collect fat grocery store-anchored income on a quarterly basis)Īn HSA is a tax-advantaged savings account intended to help people with high-deductible health insurance plans cover out-of-pocket healthcare, dental and vision expenses. Here's how much the average American 60-year-old holds in retirement savings - how does your nest egg compare? Get in now for strong long-term tailwinds Rich young Americans have lost confidence in the stock market - and are betting on these 3 assets instead. Millions of Americans could be missing out on a chance to turn their health savings account, or HSA, into a retirement money pot, according to personal finance experts. 'HSAs are the best accounts out there': This little-known tax trick can help turn your health savings account into a retirement money pot - and the IRS just made it easier to do
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