Health Savings Account (HSA)

An HSA is the only account in the code with a triple tax benefit: contributions are deductible (or pre-tax through payroll), growth is tax-free, and withdrawals for qualified medical expenses are tax-free at any age. Eligibility requires coverage under a qualifying high-deductible health plan and no disqualifying other coverage. For 2025 the contribution limits are $4,300 for self-only and $8,550 for family coverage, plus $1,000 catch-up at 55, indexed annually. Funds roll over forever and invest like an IRA, which enables the power strategy: pay current medical costs out of pocket, let the HSA compound for decades, and reimburse yourself later, since there is no deadline on reimbursing a documented expense incurred while the account was open. After 65, non-medical withdrawals are taxed like a traditional IRA with no penalty. Business owners can pair an HSA with an HDHP even when self-employed.