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Making the most of a health savings account (HSA)

Key Takeaways

  • An HSA offers a “triple tax advantage.” Contributions can be made on a pre-tax basis (or are tax-deductible). Earnings can grow tax deferred. And withdrawals are tax free when they're used for qualified medical expenses.
  • If you have the ability to cover your current health care expenses from your regular savings, leaving HSA money invested allows it to potentially grow over time.
  • Beginning at age 65, withdrawals for non-qualified medical expenses are also penalty-free—but are taxed as ordinary income, like a traditional IRA.

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This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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