HSA (Health Savings Account)

Every other tax-advantaged account gives up one of the three stages. Traditional accounts tax the withdrawal, Roth accounts tax the contribution. An HSA does neither, provided withdrawals go to qualified medical expenses. Payroll contributions also avoid FICA, which no IRA or 401(k) contribution does.

Eligibility requires enrollment in a qualifying high-deductible health plan, and the 2025 limits are $4,300 for individual coverage and $8,550 for family. From 65, non-medical withdrawals are taxed as ordinary income without penalty, which makes the account behave like a traditional IRA for anything other than healthcare.

One rule shapes how the account is often used: there is no deadline for reimbursing a qualified expense. An expense incurred while the account is open can be reimbursed years later, provided the receipt is kept, so the balance can remain invested in the meantime. The IRS places the record-keeping burden entirely on the account holder.