HSA Health Savings Accounts Strategies for 2024

Identifying the common health savings account mistakes, identifying key strategies to maximize your HSA and exploring some of the practical ways to utilize your HSA over your lifetime.

If you’re like many people, you might not be getting the most out of your HSA. Let’s explore why that might be and how you can change it.

Understanding HSA Contributions and Limits

Firstly, let’s clarify how much you can contribute to your HSA. The contribution limits for 2024 are $4,150 for individual coverage and $8,300 for family coverage. However, many people aren’t maximizing these contributions. Why? One common misconception is that you can only contribute through payroll deductions. While this is the most common method, you are able to contribute outside of your payroll deductions all the way up to the max. This could significantly enhance your retirement savings due to the triple tax advantage HSAs offer.

HSA vs. FSA: Don’t Confuse Them

Another mistake is treating your HSA like a Flexible Spending Account (FSA). Unlike FSAs, HSAs don’t have a “use it or lose it” rule. Funds in an HSA roll over year after year and can be invested, allowing your money to grow tax-free over time. This means you can contribute the maximum amount to your HSA and not worry about spending it within the same year.

The Power of Investing Your HSA

A significant error many people make is not investing their HSA funds. If you’re only earning a meager 0.5% interest on your HSA balance, you’re missing out on potential growth. In fact, I recently helped a client move their HSA to a provider offering a 5% interest rate, resulting in an additional $6,000 in interest annually. This change alone can make a substantial difference in your retirement funds.

Using HSAs for Qualified Medical Expenses

HSAs are often referred to as “medical IRAs” because they offer similar benefits but with added advantages. Contributions are tax-deductible, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free. This makes HSAs incredibly valuable for covering future healthcare costs, which are a significant concern for many retirees.

You can also use HSA funds for certain insurance premiums, such as long-term care insurance, COBRA, and Medicare Part B. This flexibility adds another layer of security for your retirement years.

Strategizing Your HSA Usage

Instead of viewing your HSA as a passive asset, you can get more out of it by taking a more strategic approach:

1. Max Out Contributions: Contribute the maximum allowable amount each year.
2. Invest Wisely: Choose an HSA provider that offers high-interest rates or investment options.
3. Delay Withdrawals: Pay for current medical expenses out-of-pocket if possible, and save the receipts. You can reimburse yourself later, allowing your HSA funds to grow.
4. Keep Detailed Records: Maintain a spreadsheet of your medical expenses to simplify future reimbursements.

Planning for Excess HSA Funds

If you find yourself with excess HSA funds later in life, there are several options. Once you reach 65, withdrawals for non-medical expenses are treated like distributions from a traditional IRA, subject to income tax but no penalties. If you pass away, your spouse can inherit your HSA and continue to use it for qualified medical expenses. For other beneficiaries, the HSA balance becomes taxable income. Consider leaving excess HSA funds to charity, which can provide a tax-efficient legacy.

Maximizing your HSA can significantly bolster your retirement savings and provide a buffer against future medical expenses. To get the most out of your HSA, ensure you’re fully funding it, investing wisely, and using it strategically.

For more detailed guidance, check out my YouTube channel, Mr. Retirement, where I delve into the top HSA mistakes and strategies, and rank the best HSA providers based on interest rates and fees.

Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!

Subscribe to Retirement Revealed to get new episodes every Wednesday.

Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337

Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify 

Additional Links:

• “Top 3 Strategies to get More out of your HSA” – Mr. Retirement YouTube
• “Ranking the 4 Biggest HSA Provider” – Mr. Retirement YouTube
• “3 Biggest HSA Mistakes” – Mr. Retirement YouTube
• “The Ultimate Guide to Health Savings Accounts (HSAs)” – KeilFP.com

Connect With Jeremy Keil:

• Keil Financial Partners
• LinkedIn: Jeremy Keil
• Facebook: Jeremy Keil
• LinkedIn: Keil Financial Partners
• YouTube: Retirement Revealed
• Book an Intro Call with Jeremy’s Team

===

Disclosures

Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.

All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.

This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.

The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past Performance is no guarantee of future results.

Legal & Tax Disclosure

Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.

Advisor Disclosures

Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services are delivered through the Alongside, LLC platform. Keil Financial Partners is independent, not owned or operated by Alongside, LLC.

Additional information about Alongside, LLC – including its services, fees and any material conflicts of interest – can be found at https://adviserinfo.sec.gov/firm/summary/333587 or by requesting Form ADV Part 2A.

The content of this media should not be reproduced or redistributed without the firm’s written consent. Any trademarks or service marks mentioned belong to their respective owners and are used for identification purposes only.

For important disclosures visit: https://keilfp.com/disclosures/

===