If you are covered by an Health Savings Account HSA eligible plan, then, you can make pre-tax contributions to a medical savings account for future health related expenses. The growth of these funds are tax free and if used for its medical purpose, the withdrawal is not taxable. However, if not used for the right purpose, then, it is subject to income tax and 20% penalty.
How to do it? if self-employed, you can set up a HSA account with any HSA brokerage or if you are an employee, you can set up through employer and deduction in your payroll.
How much can you contribute in 2024? Up to $4,150 for self-only coverage and up to $8,300 for family coverage. If you are 55 or older by the end of the tax year can contribute an additional $1,000.
You might try to become HSA millionaire but it might not be an easy task. Our advice 1) start contributing early and 2) place in relatively aggressive investments (money market might not be the best option for growth).
Link CNBC article – This investment account offers ‘rare triple-tax benefits’ that are easily overlooked—and you can contribute even more next year
Link Forbes article – 5 Steps For Anyone To Become A Health Savings Account Millionaire
