The Health Savings Account is the only triple tax-advantaged account available. Learn how freelancers can use an HSA as a powerful investment vehicle, not just a medical checking account.
For US freelancers enrolled in a High Deductible Health Plan (HDHP), a Health Savings Account (HSA) is one of the most powerful tax tools available:
Contributions are tax-deductible (pre-tax).
Growth within the account is tax-free.
Withdrawals for qualified medical expenses are tax-free.
Triple tax advantage. No other account offers this.
Individual: $4,150
Family: $8,300
Age 55+: Additional $1,000 catch-up contribution
The mistake most people make: using HSA as a medical checking account. Withdraw as expenses arise.
The optimal strategy: Invest the HSA in low-cost index funds. Pay current medical expenses out-of-pocket (from your regular checking account). Save receipts. Do not withdraw from HSA now.
In 20-30 years: Your HSA has grown tax-free. You can reimburse yourself for any past qualified medical expense at any time (no time limit). You withdraw decades of accumulated tax-free growth.
After age 65: HSA becomes like a traditional IRA. Withdraw for any purpose, just pay ordinary income tax (no 20% penalty).
Fidelity: No fees, excellent investment options, no minimum to invest.
Lively: No fees, easy to use, can invest at Schwab.
Health Equity: Large provider, good investment options.
You must be enrolled in a High Deductible Health Plan (HDHP). In 2024, that means a plan with at least $1,600 individual / $3,200 family deductible.
Free to start. No bank connection needed. 150+ currencies, tax estimates for 20 countries.
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