There are so many benefits when it comes to having a health savings account. Besides medical expenses, the savings plan also goes a long way when investing for your retirement. Not sure of how a health savings account in Idaho works? Here are the details you need.
What Is a Health Savings Account (HSA)?
An HSA is an account that you can use to pay for any qualified medical expense, including dental care, X-rays, copays, bandages, prescriptions, and other needs. It is also tax-advantaged, which means that the contributions you make are not taxed. Besides, provided that any money you withdraw from the account will be specifically for medical expenses, you also will not be taxed when you take out the funds.
How Does the HSA Work?
You can tell that HSA has more advantages when it comes to taxes, unlike IRAs and 401(k)s. So how does it work? In collaboration with an eligible healthcare plan, you get a cash cushion for medical expenses. The best part is that even if you don’t need the funding for medical needs immediately, you can still consider the money saved as an investment.
What Are the Benefits of HSA?
Here are the advantages of an HSA over other plans.
- Your employer can help you make HSA contributions every month, so you can think of it as a 401(k) match for healthcare.
- You can contact a trust deed investment company and allocate a portion of your funds from the account, which is a great deal for a retirement plan.
- All HSA contributions are personal, so you keep all the money even when you leave your job.
- When you turn 65, you won’t get penalized for withdrawing your money, even if it is an unqualified medical expense.
