Why You Should Get a Health Savings Account (HSA) When You're Young and Healthy

Why should you get a health savings account (HSA) when you are young and healthy? Simple…to save yourself money and to invest in your future.

If you are thinking, "Why should I worry about a Health Savings Account (HSA) when I'm young and healthy? Isn't that something for older people, people with families, or people facing a lot of medical bills?" I didn't have enough in my paycheck to put into a HSA when I rarely went to the doctor. However, it's one of the best things you can do for your future. I wish someone would have explained it to me so I could have started earlier. While you're healthy, saving money now can pay off big time in the future. Here's why I started contributing to my HSA, even when I didn't think I needed it.

1. Tax Savings – Pay Less Now, Save More Later

One of the biggest Savings is the tax savings. HSA lowers your Gross income, so fewer taxes come out each paycheck and at the end of the year. So, when you do contribute a small amount, you won't see much of a difference in your net income. Sometimes, when your gross income is low at the end of the year, you qualify for other tax advantages. That's money back in your pocket every payday and possibly at the end of the year. Most of the time, you don't have enough to itemize for those with medical bills, so this is the way to get the tax break. Note: The IRS sets limits on how much you can contribute, so make sure to check every year!

2. Investment Opportunities – Grow Your Money for the Future

Another great benefit of a HSA is the chance to invest your money. Unlike a Flexible Spending Account (FSA), the money you put into an HSA rolls over year after year. You can invest it like the 401k as it accumulates, but all money made adds to your HSA balance. You can select how much rolls over automatically into the investment part. Personally, I set up my account so that any balance over $1,000 gets invested. If you have an emergency, go into the system, and the money is transferred back into your available-to-use section in a couple of days. Then, I can use the card to pay the bills. This is the perfect way to invest in your future health care

3. Employer Contributions – Free Money!

If you have a high-deductible health plan, you're probably eligible for an HSA. Some employers will contribute to your HSA account. This is FREE money. Like your contribution, it gets split up and distributed over the year. That money is not taxed unless you withdraw your HSA and use it for something other than Medical. It's a smart way to save more for your future.

4. Flexibility – You Can Adjust Your Contributions

Most benefits from the employer can only be adjusted during enrollment or for life change. I was able to lower the amount I originally selected one time and I was able to add more another. When I found I was going to have more medical bills when I got cancer, I asked if I was able to add more money to the account. Why? Because I was going to be paying those bills anyway. If I can get it pretax, then it will save me money. A day or two after my payday, my contribution was in the account and I was able to use it. Check with your benefits advisor to see if you are able to do it at your company.

5. Not Managed by Your Employer – It's Yours for Life

Another great thing about HSAs is that they are managed by a third-party company, not your employer. That means if you change jobs, you won't lose your HSA. You can keep, grow, and use it at your new job or even after retirement.

6. Helps If You Lose Your Job

Life is unpredictable. I know from experience that job loss can happen at any time. You can use your HSA to pay for your health insurance premiums when you're unemployed or need COBRA coverage. I've used mine to cover doctor's visits during layoffs. It's a safety net that you'll be glad you have if you need it.

7. A Large List of Eligible Expenses – You Might Be Surprised!

You'd be surprised at what you can pay for with your HSA. It covers over the counter medications, supplies and more. Amazon now accepts the HSA for purchases. I used mine for all sorts of things – from medically prescribed vitamins (I take iron, vitamin D, and B12) to massages from Chiropractor office(prescribed by my doctor for tension headaches and lower back pain). Each year, the government makes a list of eligible items and the requirements.

8. Credit Card to Pay – Convenient and Easy

I like the flexibility of the credit card they issue. It is so much easier. I just go to the retailer or doctors and they all accept the credit card. Since these are taken out pre-tax, always keep receipts of medical. At the beginning of the year, I start a file folder and just throw them in there as I accumulate them. I may never need them, but I keep them in case the IRS wants to see them. They may require proof of what you spent with the money.

9. Get Reimbursed Later – No Rush to Use the Funds

One of the most convenient features of an HSA is that you don't have to use the money right away. If you pay for a medical bill out-of-pocket, you can submit the receipt to your HSA provider and get reimbursed later. I didn't have enough in my HSA to pay the bills at times, If the doctor didn't want to do payment arrangements (when it would be in there after payday), then I used the credit card. Requested a reimbursement when the money was in there. It's a flexible system that helps you manage your medical costs.

10. Save Money by Opting for a High-Deductible Plan

When you're young and healthy, choosing the high-deductible health plan premium is cheaper. The money saved can be put into the HSA. Just keep in mind that your deductible may be higher, so it's essential to use your HSA to help cover those costs. And even if you don't meet your deductible, you'll still save money by using in-network doctors who have negotiated discounted rates with your insurance.

11. Use Your Insurance Benefits to Save Even More

There are some things you can guarantee in life… one of which is that you or your family will get sick. If you live paycheck to paycheck as I did for so so many years, you still want to add to the HSA. I was surprised at how little difference in my paycheck it made when I did $500 a year. There are times we know how much some of our medicines will be, the dentist gave us an estimate of cost for cavities, eyeglasses…etc. So, I know that there will be some expenses the following year. I go ahead and make sure those expenses are already planned out so I can take advantage of the pretax option.

12. Invest in Your Future Health

No one can predict what the future holds. But one thing is for sure: at some point, you or someone in your family will need medical care. Having an HSA can help you be prepared for those inevitable costs. Whether it's paying for a simple checkup or covering major medical expenses like cancer treatment, an HSA can make all the difference.

I didn't know how much I'd need my HSA until I was diagnosed with cancer. I was able to access the funds I had been contributing to for years, and it helped cover medical expenses that added up quickly. After insurance, my out-of-pocket for 2 years was almost $30,000. Having that money available truly made a difference in my ability to focus on getting better rather than worrying about paying bills.

Conclusion: Start Saving for Your Health Future Now

Even if you're young and healthy, setting up an HSA now can save you money and protect you down the road. It's easy to overlook, but the benefits – tax savings, investment growth, and employer contributions – are too good to pass up. Don't wait until you're facing unexpected medical expenses to start saving. Life has a way of throwing curveballs. Invest in your medical. Your future self will thank you.