In my previous post Health Savings Account (HSA): Your Secret Retirement Plan, I discussed the many benefits of an HSA plan and why it might be a good tax-advantaged alternative to traditional retirement plans. The biggest benefits are:
- Double tax-advantaged: your deposits and withdrawals (if used for healthcare expenses) are not taxable.
- Potential growth if you invest the funds in your HSA account. Of course, the flip side of that is you can also lose your money on a bad investment.
- Unlike a Flexible Spending Account (FSA), the money in your HSA account is yours to keep even if you don't spend it all in a year.
At the time of the original posting, I personally did not have an HSA plan available through work. Since then, my employer decided to offer an HSA insurance option for 2016. Let's use this opportunity to examine whether it would be in my financial benefit to take advantage of this new option.
Read More