Health Savings Accounts
A triple tax advantaged savings account available to people enrolled in qualifying high deductible health plans.
Overview
Contributions are deductible, growth is untaxed, and withdrawals for qualified medical expenses are tax free, a combination no other account offers. Annual limits in 2024 were about 4,150 dollars for self only coverage and 8,300 for families, with a 1,000 dollar catch up from age 55. Funds roll over indefinitely, unlike flexible spending accounts, and the account stays with the owner through job changes and into retirement. After 65, withdrawals for any purpose avoid the 20 percent penalty and are taxed like traditional IRA income. Because of the tax treatment many planners treat the account as a retirement vehicle, paying current medical bills out of pocket and letting the balance compound for decades.
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