6 Funds to Add to Your HSA

Health savings accounts, or HSAs, can be a great tool to add to your investment strategy. Along with the well-known Roth IRA and the 401(k), the HSA rounds out the U.S. retirement account landscape. A well-funded HSA can help investors pay for costly medical procedures without dipping into other retirement accounts. After age 65, you can also withdraw from an HSA for non-medical expenses without incurring the 20% tax penalty. For young investors in the accumulation phase, consistently putting money toward an HSA can help reduce income tax, as contributions are 100% tax-deductible. Because the growth in an HSA is tax-free, investors with a long time horizon and high risk tolerance should consider optimizing the investment mix in an HSA for growth. If you have anticipated medical expenses in the short term, then lower-risk investments could be ideal as well. Here are six of the best funds to add to your HSA.