If you’re not investing in an HSA, you’re missing out. You’re also far from alone.
In fact, by far and away, the most common Health Savings Account (HSA) holding is cash, and it’s not even close.
An HSA isn’t optimal for everyone, but it’s a wonderful investment account for those who have access and qualify to have an account.
Opening one is step one. Next, you should be sure to invest the money held inside your HSA.
People tend to use an HSA one of two ways. You can use it to pay for expenses as they arise or you can save receipts and leave all dollars in the account to grow tax-free.
With this strategy, you pay for medical expenses with HSA money when the bills come in. The highest deductibles out there are equal to about two years’ worth of maximum HSA contributions.
The second approach used by optimizers is to leave the money in the HSA, saving medical receipts for years and years. There’s no requirement to withdraw the money when it’s spent.