This post is about how Healthcare Savings Accounts (a.k.a. HSAs) save you tons of money in way of tax savings!

So, let’s come to the point – how do HSAs save you tax dollars?

Very simple.

If planned well, the money you saved in an HSA is never taxed; Yes, you heard it right – not taxed at all – Not when you contributed, not when you invest and grow the funds, not when you take a distribution and use the money for medical expenses.

Let’s look at this with an example.

Let’s say you are 45. You save $5,000 in your HSA this year. And due to your savvy investing decisions, the money grew into a nest egg of $25,000 by the time you retire at 65. Now, you can take the money out for your post-retirement healthcare expenses, and not pay a dime in taxes.

Isn’t it great to save money for your retirement healthcare expenses and save on taxes in the process?

Think about this for a moment – and compare this with the retirement vehicles you know – such as Traditional IRAs, 401Ks, 403s, or ROTH IRAs.

Traditional IRAs, 401Ks, 403s – contributions are not taxed, growth is not taxed, however when you take the money out, uncle Sam takes his cut

ROTH IRAs – While Growth and distributions are not taxed, your contributions were taxed.

Finally, yes, there are eligibility rules – and that is for another time. The point is – if you are eligible, here is a tax planning opportunity that you want to be aware of.

Hope this information is useful. For more videos like this, please subscribe to my YouTube channel or follow me on Social Media. Thank you!

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