Retire with your HSA

Many of us may be familiar with traditional retirement options such as 401(k)s or IRAs but few are aware of the power of an HSA. Just like the name implies, a health savings account should be saved.

HSAs should be treated as an investment tool that will improve your financial picture in retirement. The best way to do that is to not spend your HSA contributions during your working years and pay cash out of pocket for your medical bills unless absolutely necessary. In other words, think of your HSA contributions the same way you think of your contributions to any other retirement account: untouchable until you retire.

By waiting as long as possible to spend your HSA assets, you maximize your potential investment returns and give yourself as much money as possible to work with. Once in retirement, as long as you saved your receipts you can reimburse yourself for qualified expenses incurred during your working years or choose to pay for medical insurance premiums, in-home nursing care, retirement community fees for lifetime care, long-term care services, nursing home fees, etc. In other words, you can reimburse yourself for those old expenses at any time. For example, if you decide in 2028 that you want to buy a retirement home in Cancun, you can just reimburse yourself for all the dental work you had done in 2023.