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Health Savings Accounts are perceived to be among the most tax-advantaged financial instruments. HSA helps people with high-deductible medical plans and controls medical costs.
Unfortunately, most people are not aware that they can invest their HSA funds.
Like any other investment, investing in your HSA will help grow your money and boost your savings in the long run. Besides, HSAs are super-advantageous in terms of tax benefits because your money grows under tax-free conditions.
Investing in HSA means placing your funds in the form of bonds, stocks, mutual funds, etc. rather than letting the money sit to earn interest. These forms of investment allow for higher returns and are reliable long-term savings.
You can invest any amount you choose, though there is a minimum limit. This limit depends on the HSA provider and has to be met before investing.
Prioritizing your investment
Like every other financial adviser in the market, we would recommend paying for medical expenses from your pocket. Then, focus your HSA money as an investment. The HSA investment should be somehow similar to your IRA or 401k assets. Consider the investment to be an extension of other retirement savings you have and treat it as so.
A good strategy would be hoarding your medical receipts for when you get paid in cash. These receipts will be helpful should you need to reimburse yourself when in need of the HSA funds.
Should you invest your HSA Funds?
If you are financially stable, investing your HSA funds should be a consideration. It is an investment that works best if one doesn’t depend on the funds to cover medical costs. For instance, if you are healthy and rarely visit the doctor.
Also, it is a good option for anyone who has the available cash flow to pay any medical expenses. However, if you live paycheck to paycheck or have a terminal condition that requires frequent visits to the doctor, HSA investment might not be the best option for you.
Turning your HSA funds into an investment is a smart and reliable move for most people. Before investing, ensure you are in a position to cater to your medical expenses without withdrawing from your funds. Contact Quest Trust Company today to open an HSA account.