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Forbes: 8 Opportunities in Your Paycheck You May Be Missing

Health Savings Accounts (HSAs)

Tax Benefits: Like FSAs, HSAs are tax-free on both contributions and withdrawals for qualified medical expenses. (They’re also free of FICA tax if part of a cafeteria plan but not if you make a post-payroll deposit into an HSA.) Unlike FSAs, you can roll over any unused amounts to future years and they can eventually be withdrawn for any purpose penalty-free after age 65. This can make them a hybrid health/retirement savings account and given the high probability of health expenses in retirement, you may even want to invest the money and let it grow tax-free for that purpose.

Pitfalls to Avoid: The penalty for non-qualified withdrawals has recently been increased to 20%, which is higher than the 10% early withdrawal penalty from retirement accounts, so this should be among the last money you touch for non-health related expenses.


More from Forbes:
10 Common Money Management Mistakes That You’re Probably Making
How To Teach Kids About Money: 10 Dos And Don’ts
10 Common Myths That Could Be Hurting Your Retirement Planning

The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.

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