Can You Save Too Much in a Health Savings Account?

October 16, 2020

As high-deductible healthcare plans become more popular, health savings accounts (HSAs) have grown exponentially in assets. This is due in part to the triple-tax savings that HSAs provide: contributions are deductible, earnings grow tax-free, and distributions are tax-free when used for qualified healthcare expenses. Is it possible to save too much in an HSA? Brandywine Oak believes the answer is no. One of the unique features to HSAs is that you can take a tax-free distribution to reimburse yourself for qualified expenses that occurred in the past, provided you have receipts. Additionally, you can take distributions from an HSA for nonhealthcare expenses once you reach age 65 just like you could from an IRA or 401(k) and simply owe taxes on the distribution.

To learn more on this popular topic, please take a moment to read Morningstar’s article

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