Hsa Calculator

A Health Savings Account (HSA), available to anyone covered by a high-deductible health plan, is the only account in the U.S. tax code with a triple tax advantage: contributions are deductible going in, the balance grows tax-free, and withdrawals for qualified medical expenses come out tax-free. Every other account gives you at most two of those three. That alone makes it worth funding, but its most under-used feature is what turns it into a stealth retirement account: the IRS lets you reimburse yourself for a qualified medical expense at any later date, with no deadline, as long as the expense happened after you opened the HSA and you keep the receipt. So instead of treating the HSA as a medical checking account — contributing and immediately draining it to pay each year's bills — you can pay those bills out of pocket, save the receipts, and leave the HSA fully invested to compound tax-free for decades. The difference is enormous: at a $4,000 annual contribution, $1,500 of yearly medical bills, a 7% return, and 30 years, spending as you go leaves roughly $236,000, while leaving it invested grows to about $378,000 — over $140,000 of tax-free growth forfeited just by which pocket pays the bills. The catch is that the invest-and-reimburse move requires the cash to pay bills out of pocket now and the discipline to keep records, and the HSA only reaches its full potential when the money is eventually spent on medical care (which, with Medicare premiums and end-of-life costs, most retirees easily do). The durable lessons: if you have a high-deductible plan, fund the HSA before a taxable brokerage; invest the balance rather than letting it sit in cash; and, if you can afford to, pay current medical bills from other money and let the HSA grow as the most tax-efficient retirement dollars you own.

Free and interactive — no sign-up, nothing to install. Read the full lesson for the plain-language explanation.