Investing in your health savings account (HSA) is a great way to save money, but it also pays off in unexpected ways. Unfortunately, many people don’t know how beneficial HSAs can be. In this post, we’ll discuss the benefits that HSAs provide and what makes them different from other savings accounts.
1. You Save On Taxes
The most significant advantage to HSAs is tax-free investment earnings. The money on these accounts can be withdrawn tax-free so long as you spend it on HSA-eligible expenses. These expenses may include doctors’ visits, prescriptions, hospital visits, and dental work.
2. You Are in Control
Unlike Flexible Spending Accounts (FSAs), HSAs give you total control. It functions like other medical spending accounts, with one key difference: There is no dollar limit on how much money can be contributed. As long as you have earned income to contribute, you can deposit without limitation(s) into an HSA as your bank will allow.
3. You Save On Medical Expenses
HSAs do not have an annual deductible. They function like other medical spending accounts, only that the reimbursements are made directly from the account balance. Because you pay with money that is already set aside for healthcare purposes, HSAs make everyday healthcare transactions extremely convenient. The better part is that you won’t need credit cards or cash payments, which often come with high fees or interest rates, hence saving on medical expenses.
Final Thoughts
HSAs are great ways to save money, but they are also beneficial in other ways. Once you have set up an Health Savings Account, you will benefit from everyday expenses as well as long-term financial goals.
