Supercharge Your HSA
Health Savings Accounts (HSAs) are a powerful tool for saving on healthcare expenses. With their unique triple-tax advantage and their range of qualified medical expenses, there are many ways to utilize this powerful tool. Have you been able to maximize your savings? Below are four (4) healthy habits you could build to save for your future healthcare needs most effectively.
Contribute to your HSA Early, Invest for the Long Run
HSAs are a tax-advantaged investment tool for your healthcare. Healthcare costs in retirement are in the triple digits and rising each year. To boost savings in the long run and prepare for future expenses, you can utilize the power of compounding interest. The earlier you start, the faster your funds can grow exponentially in your HSA, aiding you and your family on their health journey.
Consider Shoeboxing Your HSA
Although it might seem strange, one way to supercharge your HSA is to shoebox your medical expenses. Since medical expenses can be claimed months or years down the line, you can invest your HSA funds and leave them untouched. Saving medical claims can allow time for your HSA funds to grow, and you can reap the benefits of tax savings once you retire.
Maximize Contributions Yearly
The HSA contribution limits for 2023 are $3,850 for self-only coverage and $7,750 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution. With the tax advantages of HSAs, you can save on your taxes while also saving for your health. Maximizing your contributions is one of the easiest ways to save money down the line. Since your money can go in tax-free, be invested tax-free, and be written off on your taxes, there is no reason not to maximize your HSA contributions.
Your HSA Funds Stay With You
Many fear that funds in tax-advantaged accounts like HSAs will have periods where funds must be used. This is not the case with HSAs! HSAs are unique in the fact all your funds can be used year after year, and they never expire. This includes when you leave your current position. No matter what happens, your HSA funds will stay with you. Knowing this, you should utilize your HSA as a fund to use strategically rather than one you need to empty.
There are many ways to supercharge your HSA usage. Starting early to invest for the long term, using strategies like shoeboxing, and maximizing contributions are just some ways to maximize your HSA.