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Comparing HSAs to 401(k)s and IRAs

Here’s how HSAs stack up with two other popular retirement investment vehicles, 401(k)s and IRAs:
 

 HSA401(k)IRA
Do you have to pay federal tax on contributions?NoNoNo
Do you have to pay state tax on contributions?No, unless you live in CA, AL, or NJNoNo
Do you have to pay FICA on contributions?NoYesYes
Do contributions grow tax-free?Yes, unless you live in NH or TNYesYes
Are you taxed on withdrawal for non-medical costs?YesYesYes
Are you taxed on withdrawal for medical costs?NoYesYes
Is there a required minimum distribution?NoYesYes

 

Ready to open up an HSA? Get started here.

Author: James Denison