HSA Vs. 401(k): Where Should Your Money Go?
There are different types of savings accounts you might have access to that offer unique tax benefits. If your employer sponsors a 401(k) plan, you can enjoy tax-free contributions and tax-deferred growth in a traditional 401(k), or tax-free growth and tax-free withdrawals in a Roth 401(k).
Meanwhile, if you have a health savings account (HSA), you can enjoy three types of tax savings in the course of socking money away for healthcare spending. HSA contributions are tax-free, investment gains are tax-free, and withdrawals are tax-free, as long as they're used to pay for qualified medical expenses.
If you have both a 401(k) plan and an HSA, you may be wondering which one to prioritize. The reality is that funding both plans is a good bet if you can. But if your 401(k) comes with one key feature, you may want to put it ahead of your HSA.
Source Fool.com
