Single Point of View

Single Point of View is our way to occasionally share planning ideas relating to personal finance. Our goal is to pass along concepts that you may not be exposed to on a daily basis.

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Big Planning Opportunity with Health Savings Accounts

In short: fund it and invest it, don't use it.   Potentially, the best way to use your Health Savings Account (HSA) is to maximize the funding of it, but, instead of using the funds year-by-year to cover your out-of-pocket health care expenses, invest the funds and allow them to grow for the future.  The reason this strategy makes sense is the unique tax benefits of HSA's:  tax deductible contributions, tax-free growth & tax-free distributions.  Do you know what other types of accounts have all of these long-term features? NONE! IRAs & 401ks are tax deductible in the year you make the contribution, but you are taxed when you take the money out. Roth IRAs grow tax-free and are tax-free upon distribution, however, you do not get a tax-deduction when you make the contribution. The HSA combines the tax benefits of these two types of accounts. In fact, a good retirement...
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