The money in an HSA can be invested just like the money in a 401(k) or an Individual Retirement Account (IRA). The account is interest-bearing, but account owners are not taxed on the interest they earn. Withdrawal protocol is also similar to that of 401(k)s, with one notable exception. If money is withdrawn from the account for qualified medical expenses, the account owner pays no taxes on those disbursements.

Note that if an account owner uses the funds for non-medical purposes, they must pay ordinary income taxes on that amount, in addition to a 20% penalty. This amounts to approximately a 40–50% loss in value. However, if the money is withdrawn after the age of 65 for non-medical purposes, the account owner only pays the applicable tax without penalty.

Remember that your investment growth is not taxed while it is in the account. Once you reach the age of 65, you can then use the funds in your HSA for expenses not paid by Medicare. Or for anything you wish, without penalty!

CDHPCoach’s Storage Facility, where the Coach has organized and compiled a vast amount of tools and resources for you to access.

Housed here are key components and information within the book, Bend the Healthcare Trend which was the impetus behind the CDHPCoach.