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How to Get Rich With Your HSA Fund


Did you know that you can get rich with your HSA (Health Savings Account) fund through your medical insurance provider? If you are currently on the high-deductible insurance plan, then you are able to contribute money into a special savings account for your future medical needs. This money rolls over each year (so you don’t have to worry about losing it) and it can be used for your vision, dental, and any other medical needs (such as a hospital visit, medication, cold medicine, etc.). It really is a wonderful program that can help you save money for inevitable medical expenses coming  in the future.

The Incredible Benefits of Your HSA Fund

20140630 - hsaSo yes, you can contribute funds into your HSA account and get a 0.14% return each year (haha, this is not the incredible part by the way), but there are many other aspects of the account that make it all the more appealing to contribute.

  • Can Deposit Pre-tax Money – When you contribute to an HSA account, your company will deposit the money into your savings account without taking out any taxes! The HSA contribution is treated just like a 401(k) deposit. The money comes out of your check before it is taxed and goes directly into your account.
  • Can Use The Money Without Paying Tax – When you have a medical expense and need money to pay for it, you can simply use your HSA debit card and pay for it. When you do this, you might think that your payment would get taxed, but it doesn’t! You never pay tax on the money that is contributed to your HSA account!
  • You Can Invest The Money – Many people don’t know this about their HSA accounts, but once your funds increase to over $2,000 (this amount can vary – check your HSA policy details), you can actually invest that money in mutual funds, and at times, index funds – and you still don’t have to pay a tax or penalty on this money because your funds are still technically within your HSA account!
  • Move The Money Into a Traditional IRA – When you reach the age of 65, you are allowed to withdraw funds out of your HSA without penalty and use the money on whatever you want. At this point though, the money is taxable, but you have had the benefit of contributing to the fund tax free and allowing the money to grow without tax as well, which is a pretty amazing benefit for a medical savings account.

How to Withdraw the Funds Tax Free

When you remove the money from your HSA account and use the funds for something other than a medical purpose, you must pay income tax on the withdrawal (in addition to a penalty if you are not disabled or 65 years old). If you earn enough money, that means that you’ll be paying 25% or more on your withdrawal – not too appealing. But, there is a new strategy that is being tested by the younger, “retiring” generation.

You see, there are some 30-year-olds out there that have paid off all of their debts, own very little (intentionally), and therefore have very few expenses. They can travel and live a pretty decent life for less than $10,000 per year. So here’s what they intend to do. They work extremely hard for 7 or 8 years and save up around $500,000, and then they quit their jobs.

Since they have such low expenses, these young individuals do not need a large income (or any income for that matter because of the interest being earned on their investments), so they basically put themselves into the 0% tax bracket on purpose. This way, they can pull the money out of their HSA or IRA without paying any tax. If they so choose, they could even withdraw about $9,000 at a time (once per year) and transfer that money into a Roth IRA. By doing this, they will never pay tax on this money!

Pretty crazy huh? Not only do these people have a ton of money in the bank, but they can get even more wealthy by withdrawing funds out of their HSA and IRA tax free! It isn’t for everyone, but if you are looking for ways to avoid paying taxes, this might just be the information you’ve been looking for.

Are you ready to get rich with your HSA Fund?

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My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Ii love the hsa and use, which allows first dollar investing into vanguard mutual funds. I am somewhat confused on this early withdrawal strategy. I know you have to be 65 to withdrawal tax and penalty free, for withdrawals before age 65 for non medical expenses income tax and a 20 percent penalty is owed. Even for someone in the zero tax bracket they would still have to pay the penalty right? Wouldn’t that 9000 withdrawal come with an 1800 dollar penalty?

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