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Health Savings Accounts (HSAs) are "IRAs on Steroids"

Written by: PeopleKeep Team
July 9, 2010 at 7:14 AM

health savings accounts iraHealth Savings Accounts (HSAs) combine the benefits of both traditional and Roth 401(k)s and IRAs for medical expenses.

Taxpayers receive a 100% income tax deduction on annual contributions, they may withdraw HSA funds tax-free to reimburse themselves for qualified medical expenses, and they may defer taking such reimbursements indefinitely without penalties.

HSAs are unique - “IRAs on Steroids” - with triple tax advantages:
    1. Tax-deductible contributions, 
    2. Tax-free accumulation of interest and dividends tax-free, and 
    3. Tax-free distributions for qualified medical expenses.
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Topics: Health Savings Accounts, HSA