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Get an HSA — It’s “one of the best retirement accounts on the market”

insta_photos / Getty Images/iStockphoto

insta_photos / Getty Images/iStockphoto

There are many different retirement accounts out there, and choosing one can be tricky. But personal finance expert and New York Times bestselling author Suze Orman calls a health savings account “one of the best retirement accounts out there.”

Read more: Suze Orman: 5 Facts About Social Security Every Future Retiree Needs to Know

Check out: 5 Awesome Things All Rich People Do With Their Money

As Fidelity explains, an HSA is a tax-advantaged account that you can open if you have an HSA-qualified high-deductible health plan. You can use it to pay for certain medical expenses, such as co-pays, prescriptions, dental work, contact lenses and glasses, bandages, and x-rays. It is considered tax-efficient because contributions lower your taxable income and the money is not taxed while it is in the account, Fidelity added.

Additionally, “unspent HSA funds carry over from year to year, allowing you to build tax-free savings to pay for medical care later,” according to HealthCare.gov, which added that HSAs can earn interest, which are not subject to tax. .

“A health savings account is probably, when used correctly, one of the best retirement accounts because you get a tax deduction when you put money in and when you withdraw it for medical expenses eligible, it’s tax-free, and it covers almost absolutely everything except certain dental services,” Orman said in a March 2024 episode of her podcast, “Women & Money.”

Orman added, however, that while these accounts are extremely beneficial, they are intended for health needs. In other words, they don’t replace your retirement accounts.

“It doesn’t replace your 401(k) or your 403(b) or your TSP,” she said. “This does not replace a Roth IRA. So know that this works in conjunction with these retirement accounts.

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This article originally appeared on GOBankingRates.com: Suze Orman: Get an HSA — It’s ‘one of the best retirement accounts on the market’


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