How and why you should use an HSA
Did you know that you can set aside some money for medical expenses? Here is what you need to know.
Michelle Buria, Certified Financial Planner and Managing Director for Choreo, says like a 401k, HSAs are a great savings vehicle.
“But these are for medical expenses,” she said. “There are some limitations as far as who can contribute. Somebody does need to be part of an employer high-deductible … medical plan in order to contribute to an HSA.”
Contribution limits are $4,100 for individuals and $8,300 for a family. Folks 55 and older can also make “catch-up” contributions of an extra $1,000 per year.
“It’s a triple tax benefit. So the contributions are pre-tax. And then the growth of the account is tax-deferred. And then the third is as long as the moneys drawn are used for qualified medical expenses, then they’re tax-free,” Buria said.