3 Reasons to Open an HSA in 2020
Healthcare is a major expense for Americans of all ages, and medical issues are the No. 1 source of personal bankruptcy filings in the country. If you're concerned about paying for healthcare, then you should definitely see if you're eligible to open a health savings account, or HSA. Here are three reasons it really pays to do so.
You may be familiar with the tax benefits of popular retirement savings plans like IRAs and 401(k)s. Contributions to traditional IRAs and 401(k)s go in tax-free, but withdrawals are taxed in retirement. Roth IRA and 401(k) withdrawals are tax-free, but there's no tax break on contributions.
With an HSA, you'll enjoy three distinct tax benefits: Your contributions will go in tax-free, the funds you carry forward (more on that in a minute) can be invested tax-free, and withdrawals are tax-free provided they're used for qualified medical expenses. The result? A whole lot of savings for you.
Source Fool.com
