An HSA might be the best tax-advantaged retirement account available, but very few people are fully utilizing them. It works almost exactly like a Traditional IRA, except you can also do tax-free withdrawals for qualified medical expenses at any age, making it more flexible and reducing your medical costs.
A lot of people don’t know that you can actually invest inside of one too. I use mine partially to pay for medical expenses, but most of the money is invested in a target date index fund!
Note that you can only open one if you have an “HSA Compatible” health insurance plan. You would need to check with your health insurance provider to see if you qualify. Often times opening an HSA compatible plan is the cheapest option and comes with the bonus of an option to contribute to this cool tax-advantaged account!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
Sometimes I discuss the various costs associated with homeownership to dispel the myth that “your primary home is the best investment you’ll ever make”. And