Health Savings Account (HSA)

A Health Savings Account (HSA) is often called the "ultimate retirement account" because it offers triple tax advantages that no other account can match: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.

2026 Contribution Limits:

Category	Individual	Family
Annual Limit	$4,300	$8,550
Catch-up (55+)	+$1,000	+$1,000

The Triple Tax Advantage:

Tax Benefit	How It Works
1. Contribution	Reduces taxable income (pre-tax)
2. Growth	Earnings grow tax-free
3. Withdrawal	Tax-free for medical expenses

Requirements:

• Must have High-Deductible Health Plan (HDHP)
• Cannot be enrolled in Medicare
• Cannot be claimed as dependent on another's taxes
• 2026 HDHP minimum deductible: $1,650 (individual), $3,300 (family)

HSA as Retirement Strategy:

• No "use it or lose it" - funds roll over indefinitely
• After age 65, withdraw for any purpose (non-medical = taxed as income, no penalty)
• Save receipts - reimburse yourself years later
• Invest HSA funds for long-term growth

HSA Investment Example:

Age	Annual Contribution	30 Years at 7%
30	$4,300 (individual)	~$430,000
30	$8,550 (family)	~$855,000

HSA vs FSA:

Feature	HSA	FSA
Rollover	Yes, unlimited	Limited or none
Portability	Yes	No
Investment	Yes	No
Eligibility	HDHP required	Any health plan

Best HSA Strategies:

• Max out contributions annually
• Pay medical expenses out-of-pocket if possible
• Invest for long-term growth
• Keep receipts for future reimbursement