How to Grow Your Health Saving Account

If you have a high-deductible insurance, health saving account (HSA) is a great way to pay for medical expenses with triple-play tax benefits: Deposit tax free, grow tax deferred and withdraw tax free. Every year we have been contributed the maximum for family coverage into HSA. We then invest the money in broad-based index mutual funds offered in the plan. For those with limited investing options “you aren’t trapped,” said Kimberly Lankford at Kiplinger. You can still grow your health saving account. If you contribute outside of your employer’s HSA you might have to pay Social Security and Medicare tax on contributions. It’s best to continue contributing into HSA through payroll deduction to avoid the FICA taxes and to receive the matching fund if available. Then transfer the funds a few time during the year to an HSA with better investing options. (kiplinger.com)