Shoebox It! Boost Your HSA Investment Strategy

by | Nov 16, 2021

A shoebox and a health savings account aren’t two things that instantly go together in your mind. However, if you’re ready to start maximizing the potential of your HSA account, the shoeboxing strategy may be perfect for you! Many people treat their HSA accounts like a medical spending account and immediately pay for healthcare expenses as they occur. What if you paid for those expenses outside of your HSA, saved the receipts and looked at your HSA as a retirement savings vehicle instead? It turns out you’d end up with a lot of benefits.

The A-B-C-D’s of Shoeboxing

Follow these steps to get started with shoeboxing:  

Alternative Way to Pay  Anytime you have a qualified medical expense, like a copay or a prescription, pay for it with funds outside of your HSA (such as a personal checking or savings account). Leave your HSA money untouched in your account.  

Bank Your Receipts There is no deadline for reimbursing yourself from your HSA for qualifying medical expenses. That means you can pay yourself back months or years after an expense occurs (even into retirement). Save your receipts in your online “shoebox” for that later date. 

Compound Your Funds Invest your HSA money for tax-free growth in stocks, mutual funds, and ETFs. The more you consistently contribute to your account the more your funds will grow. 

Disburse Towards Your Receipts Once you retire, easily access the receipts you’ve saved online and redeem them by taking withdrawals from your HSA account completely tax-free and penalty-free. The best part is you spent years investing your HSA funds. Your balance is significantly larger than if you had reimbursed yourself as you incurred the expense. You’ve already paid off all those medical expenses as you went along, so you’re free to use the money on anything you’d like! 

shoe boxing hsa

The shoeboxing strategy is a powerful way to grow your HSA account through long-term investing. A modern HSA like SavingsOak makes it easier than ever to store your receipts online and prepare for any future healthcare cost, and even non-healthcare expenses in retirement.

Subscribe to SavingsOak Academy:

Don’t miss out on a single post! Have useful HSA information delivered straight to your inbox.

    Recent Posts

    Tribute to Alaric Aloor

    Tribute to Alaric Aloor

    We are heartbroken to share the passing of our beloved friend and advisor, Alaric Aloor, over the weekend.

    HSAs Help Women Make Progress Towards Financial Security

    HSAs Help Women Make Progress Towards Financial Security

    Women face more challenges when it comes to savings and retirement. It is primarily because women encounter a wage gap that follows them into their retirement years. Women only have 70% of the overall income in retirement that men enjoy. Many in that age group have no retirement savings at all.  In light of these facts, women need to plan for their retirement and consider health savings accounts (HSA) as a tool to help them achieve their goals and set themselves up to be financially secure.

    Are You Planning for an Early Retirement?

    Are You Planning for an Early Retirement?

    Retirement income, savings, and investments all come to mind when people plan for retirement, but one thing often overlooked is the role that healthcare expenses can play in your retirement plans. It is time to focus in on that as well.