This content is for general informational purposes and does not constitute medical, legal, or financial advice. Healthcare rules and costs change annually. Last reviewed: January 15, 2025. Always verify current details with your insurer, employer, or a licensed healthcare navigator.
HSA (Health Savings Account)
A tax-advantaged savings account for medical expenses, available with HDHPs.
Full Definition
An HSA lets you save pre-tax money for qualified medical expenses. Contributions, earnings, and withdrawals for eligible expenses are all tax-free — a triple tax advantage. Funds roll over year to year and are yours permanently. You must be enrolled in an HDHP to contribute. After age 65, you can withdraw for any purpose (paying ordinary income tax, like a traditional IRA).
Real-World Example
You contribute $1,500 to your HSA pre-tax. You pay for prescriptions, dental work, and glasses using HSA funds — all tax-free. Any unused balance grows and carries over to next year.
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