Opening a health savings account (HSA) is a great step in the right direction for your financial future. Consider an HSA as your home for medical savings. With an HSA, you can put money aside every year to pay for qualified medical expenses in the future. With the long list of eligible medical costs you can use your HSA for, it's a powerful financial tool.
But you can do so much more than simply saving. If you're not considering HSA investment, you're missing out on piles of potential cash.
About HSA Investment
The beauty of an HSA is that it has three tax advantages. The first is that your contributions up to the annual limit are tax-deductible. The second is that qualified withdrawals are tax-free. Finally, the interest you earn through investments is tax-deferred.
Investing is the best way to make your medical expense nest egg grow. You don't need much to get started. Say, for example, that you only put a couple of hundred dollars a month into your HSA, starting at age 30. With investments, that figure can grow to well over a million dollars by the time you're 70 if you earn the stock market's standard annual return of 10 percent.
That figure makes a big difference considering how health expenses get higher as you age. You don't have to withdraw from your HSA at any specific point, so investing can help you maximize savings for long-term financial growth.
There are many ways to invest through HSA. Like a brokerage account or IRA, you need to have money in your account first. Once it's funded, you can choose what types of investments you want to make. Many providers offer simple tools and automatic rebalancing, making investment approachable even with little financial experience.
Typically, the best way to invest is with stocks, bonds, mutual funds, ETFs, etc. It's a hands-off process that can earn you substantial interest over time. Because you don't pay taxes on those gains, you can sit back and watch your HSA grow over decades.
Read a similar blog about invest HSA here at this page.
No comments:
Post a Comment