Aging is inevitable. There are things we can do to stay healthy, but let’s face it: Sometime in the future, our hearing, sight, and even the quality of our teeth will start to diminish.
That knowledge probably makes you want to set aside funds now for your (basically guaranteed) health expenses in the future. A Health Savings Account (HSA) is the perfect account for that purpose.
An HSA has triple tax benefits. Contributions are pre-tax, the account value grows tax-deferred, and “qualified” distributions—those used for medical expenses—can be withdrawn free of income taxes.
If you have a high-deductible medical plan, you may qualify for a health savings account. The IRS allows individuals to put aside $3,400 and families to put aside $6,750 in 2017. The year you turn age 55, you can add another $1,000 as a “catch-up” contribution (even if you’ve always maxed out your account).
Even if you don’t need to use your HSA for out-of-pocket medical expenses now, you may want to let your balance grow for the future to cover these common medical costs: