HSA — The Best Tax Shelter Most People Ignore

A Health Savings Account (HSA) is the only account with a triple tax advantage, available to people with High Deductible Health Plans (HDHPs).

The triple tax advantage:

1. Contributions are pre-tax (reduce taxable income)

2. Growth is tax-free

3. Withdrawals for qualified medical expenses are tax-free

No other account offers all three.

2024 contribution limits:

Individual: $4,150

Family: $8,300

55+: additional $1,000 catch-up

The advanced HSA strategy:

Invest HSA in index funds (most allow this)

Pay medical expenses out-of-pocket (keep receipts!)

Let HSA grow for decades

At age 65, withdraw for ANY reason (just pay income tax — same as Traditional IRA)

Or reimburse yourself at 65 for all old medical expenses tax-free

After age 65: HSA becomes essentially a second IRA with no RMDs (Required Minimum Distributions) and an extra perk — free medical withdrawals.

Reference:

Wikipedia: Health Savings Account

https://en.wikipedia.org/wiki/Health_savings_account