What is an HSA?
An HSA, or health savings account, is a tax-advantaged savings plan for people who are enrolled in a high-deductible health plan (HDHP). You can use the accumulated funds for medical expenses, such as prescriptions, eye care, dental, and some over-the-counter medications. The funds contributed to your HSA are tax-deductible, reducing your taxable income.
One of many advantages of an HSA is that you don't have to use your contribution amount in any particular year. Instead, the funds continue to accumulate until you need them. You do not pay taxes on the earnings, and withdrawals are tax-free (as long as they are used for qualified medical expenses).
Another advantage of an HSA is that you do not lose the funds if you change health plans. Additionally, once you reach the age of 65 you can withdraw the funds without penalty and use your savings however you see fit.
Important Features of an HSA
- Contributions can be used any year - funds continue to accumulate
- Earnings grow tax deferred
- Withdrawals used for qualified medical expenses are tax free
- You do not lose the funds if you change health plans
- At age 65, funds can be withdrawn penalty-free for any purposes
What are the eligibility requirements for an HSA Plan?
To qualify for an HSA, you must meet the following requirements:
- Be enrolled in a high-deductible health plan (HDHP)
- Have no other health coverage
- Not enrolled in Medicare
- Not claimed as a dependent on someone else's tax return
How do I determine a traditional self-directed IRA is the right plan for me?
- Do you have a health plan with a high deductible?
- Are you worried about the medical expenses associated with old age and retirement?
- Do you have a pre-existing medical condition that could be costly?
- Do you want the flexibility to invest in alternative investments with your savings?
- Do you want the option to reclaim your savings for any use at age 65?
- If you answered 'yes' to all or most of these questions, an HSA may be a good choice for you.
Transfer or Rollover your funds to Entrust to get started
A self-directed HSA is different than a standard account because it allows you to have more investment freedom. Self-directed HSAs offer the unique opportunity to hold alternative assets, such as real estate, precious metals, and more. The earnings from these investments will grow tax-free, allowing you to save more for health expenses.
If you would like to transfer or rollover your existing HSA into a self-directed account, contact us today to get started.
Before making contributions to a HSA Plan, learn the contribution limits that apply: