Insights

X Breaking Down The Basics Of HSAs
Posted on August 26, 2019

Breaking Down The Basics Of HSAs

News

By Jamie Hopkins

Health Savings Accounts (HSAs) might be the single most powerful tax-advantaged savings vehicle in the IRS tax code. You can deduct contributions, experience tax-deferred gains and withdraw money tax free for qualified tax expenditures. It’s essentially a no-tax savings vehicle when used correctly. However, many Americans are missing out on this valuable tax planning, savings and investment option.

A recent report by HealthSavings Administrators shows many consumers and financial advisors don’t understand HSAs. In their survey, they found nearly 60% of advisors aren’t offering HSAs to their clients, roughly 26% don’t discuss HSAs with clients at all and 36% reported that they don’t understand HSAs. Furthermore, 40% of advisors claim their clients don’t understand HSAs either.

The lack of knowledge about HSAs leads to people underutilizing or improperly using them. The HealthSavings Administrators survey found 47% of advisors position HSAs as a short-term savings account. This supports research findings by the Employee Benefit Research Institute (EBRI), which found few Americans, roughly 5%, invest their HSA in anything other than cash.

Full article on Forbes

Share: