Employees know that they should be contributing to their employer’s retirement plan as well as an IRA. These two retirement accounts have amazing tax benefits. One of the best retirement plans that don’t really get a lot of attention is the health savings account (HSA). Here are some ways that the HSA can be beneficial.

1. Deferring money is easier. You can have money taken out of your paycheck. Or you can even deposit money directly with a check or transfer through a bank. You can sometimes even add cash in your account, but that often depends on where or who your account is with.

2. You don’t have to use it. Whatever money you don’t use by the end of the year can be carried over indefinitely. You can invest that money as HAS plan permits. When you go to the doctor, pay the small co-pays without using the HSA and you’ll see your account grow.

3. The health savings account can help supplement. After you turn 65, you can get rid of the 20% tax penalty that you would have had to pay if you withdrew from the HSA previously. Most of your medical expenses, such as your prescriptions, doctor visits, etc., will still be eligible to be tax-free.

4. No requirement on distributions. You don’t have to put in a minimum amount of distributions into your HSA, much like a Roth IRA. This lets you avoid or defer the taxes of medical expenses you could have in the future.

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