91% of HSA Participants Make This Glaring Mistake
It's unfortunate that not everyone has access to a health savings account, or HSA, because these savings plans really offer a host of benefits. For one thing, HSA contributions get to go in tax-free, and so maxing one out could result in a sizable near-term tax break.
HSAs also allow you to invest any money you don't need immediately for healthcare purposes. And any gains you enjoy in your account aren't subject to taxes.
Furthermore, HSA withdrawals can be taken tax-free provided they're used to cover the cost of qualified medical expenses. And while there are harsh penalties for removing funds from an HSA for non-healthcare purposes, once you turn 65, you can actually take an HSA withdrawal for any reason penalty-free. You'll be taxed on your withdrawals in that scenario, but that's no different than taking distributions from a traditional IRA or 401(k) during retirement.
Source Fool.com
