What are the benefits of a HSA?
Health Savings Accounts (HSAs) may help those enrolled in high-deductible health insurance plans (HDHPs) pay for qualified medical expenses. When you’re no longer contributing to the HSA in retirement, it can complement Medicare Supplement policies, such as those offered by State Farm®, by helping manage out of pocket expenses. In addition to paying expenses, you can also use an HSA as a savings vehicle. Here are six ways to make the most of it:
- Roll over remaining funds year — to — year. Yes, you can do it indefinitely. The interest accrued on your savings balance is tax-deferred.
- Contribute until tax day. If you haven't met the annual contribution limit, you may contribute through the tax filing date the following spring.
- Move funds if you want to. Your employer may have created your account when you signed up for the HDHP. However, if you'd prefer to use a different HSA, you can arrange to transfer funds. (An HSA is all yours, regardless whether an employer — present or past — sponsors it.)
- Maximize your contributions. Contribute the annual limit so you can claim the maximum tax deduction. If you're 55 or older, you also may make a catch-up contribution.
- Invest with your HSA. Some HSAs allow you to invest the money in mutual funds and stocks, which may generate a greater return. You may need to maintain a minimum amount in the account, but if you can afford it, it's an option to consider.
- Wait to meet your deductible. If your medical bills are infrequent or you can afford to cover the costs, let your savings continue to grow tax-deferred in the HSA. (If you pay some expenses yourself, keep your receipts so you can request reimbursements once you've met the deductible.)
With a health savings account, like the HSA offered by State Farm Bank®, the money in a HSA is yours to save. You control how the money is spent and you keep any interest and investment earnings from the account.
State Farm Bank®, F.S.B., Bloomington, Illinois ("Bank"), is a Member FDIC and Equal Housing Lender. NMLS ID 139716. The other products offered by affiliate companies of State Farm Bank are not FDIC insured, not a State Farm Bank obligation or guaranteed by State Farm Bank, and may be subject to investment risk, including possible loss of principal invested. The Bank encourages any interested individual(s) to submit an application for any product(s) offered by the Bank. We also encourage you to obtain information regarding the Bank's underwriting standards for each type of credit or service offered by visiting statefarm.com® or by contacting the Bank at 877-SF4-BANK (877-734-2265). If you are deaf, hard of hearing, or do not use your voice to communicate, you may contact us via 711 or other relay services. To apply for a Bank product, you may also see your participating State Farm® agent.