Is an HSA Really Worth It? Pros, Cons, and Tax Benefits Explained
Is an HSA Really Worth It? Pros, Cons, and Tax Benefits Explained Health Savings Accounts (HSAs) are often praised as one of the best tax-advantaged tools available in the U.S. — but are they really worth it for everyone? Let’s take a deep look into how HSAs work, who can benefit the most, and the potential downsides you should know before opening one. πΌ What Is an HSA? An HSA (Health Savings Account) is a tax-advantaged savings account that allows you to set aside money pre-tax for qualified medical expenses. You can only contribute if you have a High-Deductible Health Plan (HDHP). ✅ Key Tax Benefits Tax-deductible contributions (Even if you don’t itemize deductions) Tax-free growth Earnings and interest grow without being taxed Tax-free withdrawals When used for qualified medical expenses π Known as a “triple tax advantage” π 2024 Contribution Limits $4,150 for individuals $8,300 for families +$1,000 catch-up for age 55+ π What Can ...