Search News Posts

HealthSavings Blog

Think Inside the Shoebox

You might think of a shoebox as just a trusty place to keep your sneakers, but when paired with a health savings account (HSA), it offers the very best way to maximize your retirement savings dollars.

Remember that HSAs have a triple tax benefit: contributions are pre-tax or tax-deductible, interest earned is tax-free, and withdrawals for qualified medical expenses are tax-free as well. Also, your HSA belongs to you, so you keep it if you switch jobs or retire.

Many people treat their HSAs like an FSA and just use it to pay for their current medical expenses. However, you can also invest those funds for long-term tax-free growth and treat your HSA like a medical 401(k). That way, you keep the maximum amount of funds in your HSA where they’ll gain the maximum interest.

If you invest your HSA, you’ll want to pay for medical expenses out-of-pocket to avoid dipping into those invested funds. By doing this, your HSA can grow tax-free through interest on your principal and investment earnings; over the years, this can add up to a sizable nest egg!

Also, there’s no deadline for when you have to reimburse yourself for eligible expenses from your HSA. This means that if you pay for eligible medical expenses out-of-pocket rather than using HSA funds, you can reimburse yourself years or even decades down the road, once your HSA dollars have had the chance to grow.

When you pay out-of-pocket for eligible medical expenses, you’ll want to archive the receipts in a shoebox or app to prove they were qualified expenses. Then, down the road, you can reimburse yourself tax-free for those expenses from your mature HSA account.

And here’s the best part, you can use those reimbursed HSA dollars on anything you want. Boat, vacation, whatever you like … it doesn’t have to be medical at all. It’s like pulling money out of your 401(k) and not having to pay taxes on it. Learn more in the 2-minute video below.



An HSA isn’t just a flexible way to pay for current medical expenses; it’s a powerful piece of a comprehensive retirement strategy. Ready to begin investing? Click the button below to get started.


Author: James Denison