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The Hidden Power of the HSA

Hello Readers,

Are you familiar with the HSA (Health Savings Account)? Perhaps you've heard of its cousin, the FSA (Flexible Spending Account)?

Until reading I Will Teach You to Be Rich by Ramit Sethi, I didn't understand what an HSA was or what it could do for me. At my last job I had an FSA which did me well at that time.

So what's the difference? Which one is superior? Investopedia created a helpful comparison chart so you can see for yourself:


While Sethi calls HSAs "Your Secret Investing Weapon," not everyone is eligible. If you *can* sign up for one, any money you invest that isn't used (i.e. thousands of dollars) will grow year after year. Money entered and earned is tax free.

The only kicker is if you withdraw for non-qualified medical expenses before age 65, there is an income tax fee plus a 10 - 20% penalty. If you pull the money out after age 65, you can use it for whatever you want without penalty (but the money is taxable).

Think of this as another retirement investing opportunity in addition to your 401(k) and IRA accounts.

Are you investing in an HSA?

Happy savings,


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