Video
What is an HSA?
Learn about the purpose of a health savings account (HSA) and how it works.
What is an HSA
Narrator:
Take charge of your healthcare spending. Save smart, it’s easy with a health savings account, or HSA.
An HSA is used to save for qualified medical expenses for you and your eligible dependents, both now and in the future. It works like a regular bank account.
However, an HSA has big tax benefits. In fact, in most cases there are three ways an HSA helps you keep your money in your pockets and out of Uncle Sam’s.
First, generally you won’t pay federal income tax on money you deposit into your account. Keep in mind the IRS sets limits on how much you can contribute each year.
Second, you won’t pay income tax on money you use for qualified medical expenses, that includes vision and dental expenses.
And third, your savings grow income tax free, helping you create a nice little nest egg for retirement.
More good news, with an HSA there’s no use it or lose it rule, that means the money in your account is yours to keep, even if you change jobs or health plans.
Who’s eligible for an HSA? The main requirement is that you’re covered under a qualifying high-deductible health plan or HDHP. Although there are additional requirements defined by the IRS.
So, don’t wait, if you don’t already have an HSA open one! If your HSA is already up and running, contribute to it.
Start taking charge of your health care savings and spending with a health savings account, an easy way to save smart.
Related resources
Investing with an HSA
Qualified medical expense tool
How to use an HSA
Self-directed mutual fund investment options are made available through the services of an independent investment advisor, or your plan sponsor. Discretionary advisory services are provided by Betterment LLC, an SEC-registered investment adviser, with associated brokerage transactions provided by Betterment Securities, Member FINRA/SIPC. For details and disclosures visit betterment.com. The Schwab Health Savings Brokerage Account is offered to certain account holders through Charles Schwab & Co., Inc., Member FINRA/SIPC. For details and disclosures, visit schwab.com. Brokerage services are offered to certain accountholders through TD Ameritrade, Inc., Member FDIC/SIPC and a subsidiary of The Charles Schwab Corporation. For details and disclosures, visit tdameritrade.com.
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