What Is an HSA?
A Health Savings Account (HSA) is one of the most powerful financial tools available, offering tax advantages for medical expenses while doubling as a long-term savings vehicle. Whether you're looking to save money on healthcare costs or invest for the future, an HSA can help you lower your tax bill and build wealth over time.
In this article, we’ll explore what an HSA is, its benefits, and the top five places to open an HSA.
The basics
A Health Savings Account (HSA) is a tax-advantaged savings account designed for individuals with a High-Deductible Health Plan (HDHP). It allows you to save and invest money for qualified medical expenses while enjoying three key tax benefits:
✔ Tax-free contributions (lowering your taxable income)
✔ Tax-free growth on investments
✔ Tax-free withdrawals for qualified medical expenses
Who’s Eligible?
To contribute to an HSA in 2024, you must:
Be enrolled in an HSA-eligible High-Deductible Health Plan (HDHP)
Not be enrolled in Medicare
Not be claimed as a dependent on someone else’s tax return
Contribution Limits (2024)
$4,150 per year for individuals
$8,300 per year for families
$1,000 catch-up contribution for those 55 and older
The Benefits
An HSA is more than just a savings account—it’s a powerful investment tool. Here’s why:
1. Triple Tax Advantage
Contributions are tax-deductible (reducing your taxable income).
Earnings grow tax-free when invested.
Withdrawals are tax-free when used for qualified medical expenses.
2. Investment Growth Potential
Unlike a Flexible Spending Account (FSA), HSAs let you invest your funds in stocks, ETFs, mutual funds, and more—helping your money grow over time.
3. Funds Roll Over Indefinitely
Unused funds never expire. You can build up your HSA and use it for future medical expenses—even in retirement.
4. Use for Retirement Expenses
After age 65, you can withdraw HSA funds for any purpose (though non-medical withdrawals are taxed as regular income).
5. Portable & Flexible
Your HSA stays with you even if you change jobs, switch insurance plans, or retire.
Top 5 Places to Open an HSA
Choosing the right HSA provider is essential for maximizing your benefits. Here are the top five HSA providers in 2024 based on fees, investment options, and ease of use:
1. Fidelity HSA
✅ No monthly fees
✅ Great investment options (stocks, ETFs, mutual funds)
✅ Strong reputation and excellent customer service
2. Lively HSA
✅ No fees for individuals
✅ Easy-to-use platform with investment options
✅ FDIC-insured cash accounts
3. HealthEquity HSA
✅ Top choice for employer-sponsored plans
✅ Broad investment options
✅ Industry leader in HSA management
4. HSA Bank
✅ Low fees and investment flexibility
✅ Strong banking features and debit card options
✅ Easy integration with health plans
5. Optum Bank HSA
✅ Backed by UnitedHealthcare
✅ Wide range of investment options
✅ User-friendly online tools
Why an HSA Is an Essential Financial Tool
An HSA is more than just a healthcare account—it’s a powerful, tax-advantaged way to save for both medical expenses and retirement. By investing your HSA funds, you can build long-term wealth while reducing your tax burden. Whether you're looking for a smart way to cover healthcare costs or a strategic way to grow your savings, an HSA is one of the best financial tools available.
Start your HSA today and take advantage of tax-free savings for a healthier financial future!
