Health Savings Account (HSA)

The HSA is the only account with three tax advantages at once: contributions are deductible, growth is untaxed, and withdrawals for qualified medical costs are tax-free. Nothing else in the code does all three, which is why it outranks even a 401(k) beyond the employer match for anyone eligible. Unspent money rolls over indefinitely — unlike a flexible spending account, which is use-it-or-lose-it — and most providers allow it to be invested rather than held as cash, which is the step people miss. Hence the stealth-retirement strategy: pay current medical bills from your own pocket, keep the receipts, and let the balance compound. After 65, non-medical withdrawals are simply taxed like a traditional IRA. Eligibility requires a qualifying high-deductible health plan.

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