Did you know Americans have saved nearly $150 billion through Health Savings Accounts (HSAs)? That’s because HSAs are more than just a place to set aside money for medical expenses, they combine tax advantages with long-term flexibility. If you’re enrolled in a high-deductible health plan (HDHP), an HSA could be one of the smartest financial tools in your toolkit. Here’s why:

What are HSAs?

HSAs are savings accounts that allow people with high-deductible health plans to set aside pre-tax money to pay for qualified medical expenses, helping to afford healthcare costs.

How can HSAs boost your financial health?

Health Savings Accounts offer tax benefits, long-term retirement perks, and flexibility. Here’s how:

1. Save on taxes today: When you contribute to an HSA, you get an immediate tax advantage. Contributions from your paycheck are taken out pre-tax, lowering your taxable income right away. If you contribute independently, you can still claim a tax deduction when you file. In short, every dollar you put in can help reduce your tax bill.

2. Grow your money tax-free: Your HSA isn’t just a savings account; it can also work like an investment tool. Any interest earnings grow tax-free and can add up significantly over time. Be sure to consult a tax professional before changing your savings, since restrictions and rules may apply.

3. Spend tax-free on medical costs: Use your HSA for qualified medical expenses like doctor visits, dental care, prescriptions, or even eyeglasses, all without paying taxes on that money. For more information, visit www.irs.gov.

4. Take it with you: Your HSA goes with you even if you switch jobs or health insurance providers. For instance, if you leave your current employer and join a new company, your HSA funds remain yours and can still be used for qualified medical expenses.

5. Use it in retirement: At age 65, you can withdraw funds for any reason without penalties. For example, you can use your HSA savings to help cover travel, hobbies, or everyday living expenses once you retire. Just note, non-medical expenses are taxed like regular income.

HSAs can help you save on health expenses today while building financial flexibility for the future. With so many advantages, they’re worth considering as part of your broader financial strategy. Interested in learning more? Visit efirstbank.com or stop by your nearest FirstBank location.

For more tips and tricks, visit our Financial Health page at efirstbankblog.com.

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Published: September 16, 2025