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Health Savings Accounts (HSA) Explained: How They Work and Why They’re Valuable

A Health Savings Account (HSA) is a powerful financial tool that allows Americans to save money tax-free for medical expenses. HSAs are especially valuable for long-term healthcare planning.

HSAs offer three major tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.

To open an HSA, you must be enrolled in a High-Deductible Health Plan (HDHP). Compare HSA providers for fees, investment options, and reimbursement features.

What makes HSAs unique:
• Triple-tax advantage
• Funds roll over year-to-year
• Employer contributions may be available
• Can be invested for long-term growth
• Can be used for dental, vision, and other eligible expenses

Check contribution limits annually—they increase periodically based on inflation.

HSAs gained popularity as healthcare costs increased and more employers shifted to HDHPs.

Available nationwide to eligible individuals; contribution limits vary by IRS updates.

HSAs are one of the best long-term savings tools for medical expenses and retirement health planning.

Key Details
• Eligibility: Must have HDHP
• Benefits: Triple tax advantage
• Contribution limits: Set yearly by IRS
• Bonus: Funds can be invested like a retirement account

Maximizing an HSA provides both short-term savings and long-term healthcare security—especially when investing unused funds.

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