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4 ways to use health savings accounts to boost your bottom line


  • Health savings accounts, which are available to you if you have a high-deductible health plan, are often touted for their many tax advantages.

  • Financial experts point to ways to use these accounts to help boost your bottom line, as long as you follow certain rules.

  • Managing these accounts correctly will help you cushion your savings for emergencies and add to your retirement funds.

When it comes to investing your money, health savings accounts offer some of the best tax breaks around.

Also known as HSAs, these options are tied to high-deductible health plans.

They enable you to put away pre-tax money for qualified health expenses. The investments in those accounts grow tax-free. And when you take the money out, generally those funds are not taxed.

"I always point to the virtue of the HSA from a tax standpoint," said Christine Benz, director of personal finance at research firm Morningstar. "If you stack it up compared to a 401(k) or an IRA, it's going to come out ahead."

To get the most out of your HSA, it helps to save and use the money strategically.

Taking advantage of these tips can help.

Think of your HSA as a retirement account

Be on the lookout for better fund options

Consider a one-time IRA-to-HSA transfer

Keep the funds for a rainy day

When looking for the right Health Insurance plan, a knowledgeable agent will be able to discuss the basics of an HSA and offer some referrals to either a financial adviser or a banker to assist you in your set up. Don't let high-deductible health plans pass you buy if they are the right choice.

Set up an HSA and enjoy the tax savings, and the premiums.

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