Health savings account are really underrated but they are going to save you a lot of tax if you get them. while you might be aware of the common ways in which an HSA can be utilized, you surely need to know about these unique strategies to help you plan your savings account accordingly. Keep reading to know more.
Maximize the compounding
Some people who use HSA are using it as an IRA by collecting the medical expenses receipts over the years but not taking the distributions that are given by HSA until much later in their life so that the tax-free compounding time period can be maximized by them. the good part is that there is no time limit on this so if you are good at recordkeeping this will help you.
Fund your retirement with HSA
If your age is over 65 years then you can still roll HSA balances into a regular IRA. The funds can then be spent on health expenses which are nonqualified without any kind of penalty. However, in doing so the distributions that are given from IRA will be taxable and the balances are going to be subject to RMDs after the age of 70.5.
Maximize the social security incomes
If you have qualified medical expenses for which you have used the HSA in retirement but if you don’t roll it into the IRA then you can actually be benefited. You can have fewer of the social security benefit dollars that you have taxed in retirement.
Tax benefits and savings
If you want to save a lot of money then saving in an HSA is the best way to do it. HSA will have a lot of savings over your regular taxable brokerage account so make sure you get one.