You can use HSA funds at any time. Contributions can be carried forward indefinitely, and you can invest those funds for growth. With the average person incurring more than $400,000 in medical expenses in retirement, a tax-free, accessible pool of money can transform your retirement plan.
Many employers offer HSAs, but they can also be opened privately by individuals. Single people can contribute up to $3,600 annually, and families can double that. People over age 55 can contribute an additional $1,000. Funds withdrawn for nonqualifying expenses are available, but they’ll come with a 20% penalty plus taxes. Plan accordingly.
Ultimately, the best account for you depends on personal circumstances. For most people it’s beneficial to use different account types to unlock the benefits of each. Consider these other options before putting all your eggs in the 401(k) basket.
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