Health Savings Account Explained: How to Invest in Your HSA

A Health Savings Account is great for anyone not on Medicare! The tax advantages associated with an HSA makes is one of the best investment tools available. Take advantage of free money and let it grow your retirement fund as passive income! Many examples given to showcase the benefits. HSAs are a secret tool of the wealthy, but it's no secret. And it doesn't matter if you're 60 or 20 years old, now is a great time to start, and I show you how.

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Educating yourself with knowledge is the best investment you can make.

00:00 - Intro
01:37 - Topics Covered
02:05 - Defining Health Savings Accounts
02:34 - Defining High Deductible Health Plans (HDHP)
03:10 - Employer Contributions to HSA
04:05 - Max HSA Contributions 2023
04:20 - Contribution Example
04:39 - HSA Advantages
05:35 - HSA Compared To FSA
07:09 - HSA Choices Examples
09:46 - HSA Pre-Tax Example
10:04 - HSA Bank Options
12:48 - HSA Growth Examples
13:54 - HSA Early Retirment Example
14:39 - HSA Middle Age Example
15:26 - HSA Pitfalls

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#investing101 #investingforbeginners #retirement #retirementplanning #financialfreedom #howtobecomeamillionaire #millionaire #millionairemindset

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All opinions expressed by Brian are solely provided as content. Do not treat any opinion by Brian as gospel that needs to be recreated. Brian is not a fiduciary or financial advisor. All financial topics are for illustration where the outcomes are not guaranteed or expected. There exists real risks in all forms of investment, so do your homework and make your own decisions.

[kg]

Great option for investment, hopefully the government and insurance companies will ease restrictions and allow everyone regardless of insurance plan to utilize HSA accounts in the future

[FirstNameLastName-okayyoutube]

With an HSA the birth of my child was 3, 600. Yes the bill the hospital sent to insurance was insane, but after all of the chaos over 10 months of trying to figure out what I owed for real, it came out to about 3, 600 which was taken from my HSA. I recommend calling insurance at least three times to get confirmation

[randolphh]

Brian, great site and info!
You missed a couple additional points, although your summary is excellent.(I wish I had seen it 20 years ago)
The catch up contribution applies to both members of a couple(if they are both covered and at the correct age) BUT, the spouse has to contribute to their own HSA, meaning the family max plus one catch-up to one account and the other catch-up to a separate account. Also you don’t have to have earned income to contribute, but it is still a deduction on Schedule One.
The second point is that once you have been covered by an HSA/HDHP, any future eligible medical expenses can be paid from those funds. AND the list of eligible expenses is much larger than what the HDHP was covering. These include health insurance premiums, over the counter products, and an incredibly long list of items published on the IRS website.
That will lead to a much larger ultimate tax benefit than even you mention for a much larger HSA balance, as you won’t have to treat it as an IRA. AND as you touched on HDHP premiums are lower, also saving you more money up front.
Once on Medicare you can use it for Medicare premiums which are substantial as well as a huge amount of out of pocket costs and long term care costs or insurance.
And, I’m sure you are aware of the strategy of saving receipts today for eligible HSA expenses, and then withdrawing that money in later years rather than today.
Unfortunately HSAs and HDHPs are complicated by multiple rules and strategies, that we also learned slowly. The sooner one learns all these the more advantageous they become!
(I do also endorse your point of being in reasonable health, and avoiding years of expected high expenses like childbirth) Although I’m waiting for someone to do a video on paying costs now with HSA money vs investing the money and keeping the receipts for future withdrawals(is it a wash?).
We are in our mid 60’s, and though we have a good amount of HSA money, it is no where near a million, I do think we will easily spend $15-20k per year for HSA eligible expenses in today’s $ over our life span, and a lot more if we need LTC.

[susanbowers]

Just subscribed to your channel today after searching for investing advise. I enjoy your content very much, thank you. Found this video since I've had an HSA for maybe 10 years and sad that I'm just now learning about the investing part of it and just retired. Life is so busy when your raising a family and working full time. Seems like I have all the time in the world now to get myself educated. LOL

[mikeng]

But you failed to mention that you can “file” all your medical expenses and withdraw HSA funds when you turn 65 and get refunded for all of them tax free even if they are 40 year old bills. Isn’t that true?

[DinSea]

The main problem I see is that unless you're very high income where you don't qualify for subsidies the Hdhp is actually more expensive than the silver and gold aca plans with a subsidy.

[randolphh]

I’m not sure if you stated the over 55 catch up contribution properly. If both over 55, both can add $1000 BUT only one of those can go to the “family plan” the extra $1000 for the spouse needs to go in a separate HSA account, so the couple over 55 can contribute $10, 300 in total, but in 2 separate accounts

[Siddhartha-levz]

That is great information on HSA. Thanks Brain.

[jackcarraway]

I currently can't make direct contributions to mine since I'm on Tricare, but I set mine to 100% DIA so that way it feeds itself and grows on its own.

[jnordman]

I had random HSA's for years and didn't know or pay attention to the investing part. Finally consolidated them all and I'm coming close to being able to use mine as an investment account at my current employer. They require at least 10K available to convert a piece to a self-managed HSA Brokerage. Because I started throwing a little money at it at 18 then consolidated here...almost there. Excited. Also think it would be fun to teach people this when graduating high-school or maybe right into college...any thoughts on that?

[DRACU]

Hmm.. the baby birth example threw me way off! Why did you compare the FSA and HSA to a PPO? FSA and HSA are not health plans like a PPO, at least not from my understanding. Wouldn’t you use the money in your FSA or HSA to pay for the $2, 500 hospital bill, hence the benefit of having such accounts?

[hownwen]

We finally have the option for HSA but unfortunately we'll need to wait until next year. I have upcoming surgery and hubby has a procedure. Darn....

[LK_EBM]

I contributed to an HSA for about 2 years, and now no longer have a HDHP. I'm early 30s.

What should I do with my HSA now that I no longer contribute to it? I don't need to use the money in it anytime soon. Should I just keep it invested (in total stock market ETF), and let it grow until I retire?

[bossmanxll]

hi i have question about Hsa if i live in California. Can you explain what are the difference? 1. i wonder can i use this for my tax deduct when i do income tax? 2. if i sell the stock that i invest but i dont put dont use it yet do i have to pay tax ?

[OfeliaDu]

I'm 62, a healthy woman. Is too late for me to open an HSA? I bike and swim

[lutheran]

How do I contribute on my account? I opened mine on January and it already has money in it. Did that come from my salary or is that employer contribution? Also they charge me for HSA admin fee every three months.

[yellow]

How do I invest my HSA funds? I want to understand money and investing but it's really hard for me to grasp.

[sexygeek]

I had several plans in the past that appear to meet the requirements for a HDHP, but the plan administrator told me that it wasn't HSA-eligible.

[maximiangonzalez]

I work at a bank, and the bank offers HSA savings account. They contribute up to $500 a year. Its better for me to open an HSA with the bank because of the contribution as opposed to going else where such as Fidelity, correct?

[Corneliasbaby]

What is considered a family for a HSA contribution?