With tax-deductible contributions, tax-free growth and tax-free qualified distributions, this triple-tax-free feature makes HSAs one of the most tax-efficient savings vehicles available.

When investing funds in the account, you must consider your risk tolerance and time horizon to access the funds, as you will be exposing the account to investment risks.

Despite the long-term tax benefits, many individuals still utilize the accounts for ongoing medical expenses before retirement due to the high cost of health care.

While this still affords you a tax benefit due to contribution deductions, you are shortchanging the potential tax benefits.

If you can pay for ongoing medical expenses from cash reserves and leave funds in the account to grow, the HSA can be used to build a pool of funds for health care costs in retirement that are, if properly utilized, never taxed.

Distributions not used for qualified medical expenses before age 65 would…

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