Why HSAs are a good idea and FSAs are a maybe
Team HSA, all the way! Health Savings Accounts help you with savings in three ways.
Save money right away by paying less in taxes.
Save money for medical expenses that might come up in the next few years.
Save and invest money for the long term, when you will likely have more medical expenses. (The investment potential is the reason HSAs are an extra good idea, even for healthy people. Don’t forget to invest this! 💸)
HSAs are only available with high-deductible health plans, which are the more affordable types of plans that young healthy people already have. And yes, you can still get one on your own, even if you don’t have employee benefits.
With Flexible Spending Accounts, or FSAs, you can also save money on taxes. But it’s use it or lose it, meaning you have to spend all the money you set aside before the end of the calendar year. It’s a good idea if you spend a lot on health care. If you’re pretty healthy, you could end up losing money with an FSA.
Bottom line: If you have a health plan that qualifies for an HSA, get one. There’s no downside. If you have more medical expenses than average, adding an FSA will allow you to pay less in taxes. Read more about HSAs and FSAs here.