Health Savings Accounts

What this video covers

• Why the Health Savings Account (HSA) is the only account with a true triple tax advantage: pre-tax contributions in, tax-free growth, and tax-free qualified medical distributions out
• The strict eligibility requirement of enrollment in a High-Deductible Health Plan (HDHP) to contribute, and the hard stop on contributions once enrolled in Medicare
• 2026 contribution limits and structure for self-only and family coverage, plus the $1,000 catch-up provision at age 55 (not 50)
• The severe 20% penalty on non-qualified withdrawals before age 65, and how the account effectively converts to a Traditional Individual Retirement Account (IRA) after age 65 with ordinary income tax only
• Why HSAs are portable, individually owned, and feature unlimited rollover, compared to Flexible Spending Accounts (FSAs) that are employer-tied and generally use-it-or-lose-it
• How HSA funds can be invested in stocks, bonds, and mutual funds while FSA funds cannot
• The exam's favorite trap of applying triple-tax or penalty rules to wrong account types