3 in 4 HSA Participants Could Be Making a Huge Mistake
IRAs and 401(k)s are great plans in which to save for retirement, thanks to the tax breaks involved. With a traditional IRA or 401(k), your contributions go into your account tax-free. With a Roth IRA or 401(k), contributions are made after they're taxed but you won't pay taxes on investment gains or withdrawals.
HSAs, or health savings accounts, give you all of those benefits combined. HSA contributions are tax-free, investment gains are tax-free, and withdrawals are tax-free with a caveat -- they must be used to cover qualified healthcare expenses.
As of the end of 2023, the average HSA balance was $4,380, according to data from Bank of America. But that same data reveals that most HSA savers may not be making the most of their accounts.
Source Fool.com
