Strategies to Maximize the Value of your HSA
Published on March 16th, 2023
So you’ve enrolled in a health savings account (HSA) with your employer – but do you know if you’re taking full advantage of it? Enrolling in your HSA likely involved at least a bit of upfront research, and that research shouldn’t stop once you have successfully enrolled. As you prepare to file your taxes this spring, your HSA should be top-of-mind as a money-saving investment vehicle.
There are some great ways to maximize the value of your HSA. While many are likely unaware, you can optimize your money by investing it in your HSA, especially for retirement. Most don’t think of an HSA as a savings account, but rather as an account used to set aside money, tax-free, to pay for healthcare expenses. But the reality is an HSA is much more than a health benefit account – it’s also a long-term savings vehicle!
HSAs are a great tool to build wealth and begin saving for healthcare costs into retirement, providing a complement to 401Ks and IRAs. While you may already be investing in a 401K or IRA, an HSA can offer greater savings and tax advantages than these traditional accounts. While an individual may put money into these accounts tax-free, and the money continues to grow tax-free, the individual must pay income taxes on all withdrawals regardless of how money is spent. However, with HSAs, money can be withdrawn tax-free for eligible healthcare expenses. This video helps explain the power of investing into an HSA.
Another way to make your money work for you through an HSA is by selecting a high-yield option. Alegeus recently launched High-Yield for WealthCare HSA account holders to maximize the value of the funds kept in their cash (spending) accounts, potentially giving them more to spend on healthcare needs now and in the future. It comes as a standard option for users of WealthCare HSA, the industry’s first multi-path investment solution, which addresses the needs of the entire workforce by providing best-in-class engagement and features for spenders, savers and investors alike.
With tax season coming up quickly, make sure you’re taking full advantage of health savings accounts – and make your money work for you!