What is an HSA? Understanding the Basics of Health Savings Accounts

Health Savings Account (HSA) is a financial tool that allows individuals to save money for medical expenses tax-free. It is an account that you can contribute to throughout the year to cover qualified medical costs for yourself, your spouse, or dependents.

Here are some key points to understand about HSAs:

• Contributions to an HSA are tax-deductible
• Funds in the account can be invested and grow tax-free
• Withdrawals for eligible medical expenses are tax-free
• Unused funds roll over from year to year
• HSAs are portable, meaning you can keep the account if you change jobs

A Health Savings Account (HSA) is not just a smart way to save for healthcare costs; it's a savvy financial tool that offers significant tax benefits. By setting aside money in an HSA, you can effectively lower your taxable income while preparing for future medical expenses.