Definition

A tax-advantaged savings account specifically for medical expenses. You contribute pre-tax dollars, and the money grows tax-free.

What to consider

  • Enjoy tax advantages while saving for medical expenses.
  • Keep track of contribution limits each year.
  • Plan for both current healthcare needs and future expenses.

Real world scenarios

  • Darius deposits pre-tax money into his HSA each paycheck, building a cushion for future medical procedures.
  • When Vanessa needs a prescription, she uses her HSA debit card, appreciating the tax-free nature of the purchase.
  • Over time, Arturo invests his HSA contributions, letting the balance grow for significant healthcare needs in retirement.

Related terms

Reviewing: Healthcare (60 of 100)
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