HSA- The Best Investment Vehicle

Transcript

What is the best investment vehicle available to you? Bar none. This is Antwone Harris with Platinum Bridge Wealth Strategies. It's not what you think. It's not the Roth IRA account. It's not an IRA account. It may be an HSA account; a health savings account. Now, many of you have access to this through your employer, or you're eligible to do this as a self employed individual or a business owner, but you may not be taking advantage of it.

One, you may confuse it with an FSA account, which is an account that you can use for medical expenses, but you have to have, you have to spend all the money before the end of the year. This is different. An HSA account is actually an investment account and you can put the money in tax free. It grows tax free and you pull all the money out tax free.

It's the only account that offers triple tax advantage. That's what may make this the best account available for you. If you have access to it, you most likely should be taking advantage of it.

Here's a general perspective on how they work. So you have to switch to a high deductible health plan, meaning that you have to have an insurance offering through your job, potentially, or through your business that has a high deductible. Once you do that, you're eligible for an HSA account. Now, you can add up to a limit. The limits change each year, but they're pretty generous limits.

Once you're over age 55, you can add additional money to these accounts. Now, the key is that you can invest within these accounts much like you would an IRA account. So you can buy funds and growth funds and stock based funds, bond based funds, but you want the accounts to grow over time, of course. You're able to pull this money out tax free provided that you use it for qualified medical expenses which is very broad. Here's a key that I'll predict. As you get older, you will have medical expenses, right? So if you can have an account that can take care of all your future medical expenses tax free, that's a win for you in retirement.

And one of the largest expenses for people in retirement are their health care expenses. This is a big deal. If you decide you do not want to use it for medical expenses there's a 20 penalty when you take the money out. However, once you're over age 65 That 20 penalty goes away so you can use it for whatever you like to use it for. The only caveat is you'd have to pay income taxes when you take the money out.

So if you pull the money out and use it for qualified medical expenses, you pay no income taxes on all of that money that you have in the HSA account. Okay? If you pull it out and use it for something other than qualified medical expenses, after age 65, there's no penalty, but you will pay income taxes on the withdrawals from that account. So even if you decide you're not going to use it for medical expenses, it's a way to get a tax deduction on the front end. So you put in $3,000, you get a tax deduction that year. Now, many of you make too much money to get a tax deduction on an IRA account, but you could get a tax deduction on an HSA account, allow it to grow, and then use it for medical expenses and not pay any taxes on the way out, or if you wanted to use it for something else besides medical expenses after age 65, you pull the money out, you pay income taxes on it, but you'd pay income taxes on a withdrawal from a 401k or an IRA anyway, you'd pay income taxes on a withdrawal from a 401k or an IRA anyway. But, here you get the tax deduction on the front end. So it sounds like a win win if you have an HSA account at work or if you have the opportunity to do it through your business. You don't know how to do it. Reach out to me. I'm happy to walk you through all the details, but an HSA account may be the best account that you're not taking advantage of and the best account that you have available to you at any rate.

So this is Antwone Harris with Platinum Bridge Wealth Strategies, and I'll talk to you soon.