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Health Savings Accounts (hsas)

overall review score: 4.5
score is between 0 and 5
Health Savings Accounts (HSAs) are tax-advantaged savings accounts that can be used to pay for qualified medical expenses. They are designed to help individuals with high-deductible health insurance plans save money for healthcare costs.

Key Features

  • Tax advantages
  • Ability to roll over funds from year to year
  • Portable and owned by the individual
  • Can be used for a wide range of medical expenses

Pros

  • Tax benefits - contributions are tax-deductible and withdrawals for qualified medical expenses are tax-free
  • Flexibility - funds can be used for a variety of medical expenses, including dental and vision care
  • Ownership - the account belongs to the individual and can be carried over even if they change jobs or health insurance plans
  • Potential to grow savings over time through investments

Cons

  • High deductible requirements - individuals must have a high-deductible health insurance plan to qualify for an HSA
  • Limits on contributions - there are annual limits on how much can be contributed to an HSA
  • Penalties for non-qualified withdrawals - withdrawing funds for non-medical expenses before age 65 incurs taxes and penalties

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Last updated: Sat, Feb 1, 2025, 08:54:05 PM UTC