later, such as in retirement.
Also, you can’t make new
contributions to an HSA
after Medicare coverage
begins, even if you’re still
working, but you can con-
tinue to use the money that’s
already in the account tax-
free for eligible costs that
aren’t covered by insurance.
Set your strategy. Before
you pledge to invest for
the long term in your HSA,
check out the decision tree
on page 48. The best ap-
proach to saving in your
HSA depends on how
much cash you have avail-
able elsewhere to cover out-
of-pocket medical expenses,
your HSA plan’s minimum-
balance requirements and
how long you think it will
be until you need to with-
draw the money from the
account.
Your decision also hinges
on how much you’re saving
in your 401(k) or other re-
tirement plans. If you don’t
have enough money to max
out your HSA and 401(k),
start by making sure you’recontributing enough to your
401(k) to get the most out of
any match your employer
offers. Then, shift your at-
tention to your HSA. If it
turns out you’re able to save
more after hitting the maxi-
mum HSA contribution,
switch back to saving in
your 401(k).
If you have access to an
HSA through your em-
ployer, that provider’s plan
is likely your best bet. Most
employers that offer access
to an HSA cover the admin-
istrative fees. Many alsoseed the account with a
company contribution.
If your employer doesn’t
offer an HSA, you don’t like
the HSA provider your em-
ployer uses, or you’re buy-
ing health insurance on
your own, most banks and
brokerage firms offer HSAs
to anyone with an eligible
policy. You generally won’t
be able to get an automatic
pretax payroll deduction if
you open your own account
(you can deduct your con-
tributions later), but you
may find lower fees and■ MARIANELA AND
EDGAR COLLADO, WITH
SONS (CLOCKWISE FROM
TOP) JULIAN, CHRISTIAN
AND JONATHAN, ARE
USING THEIR HSA TO SAVE
FOR MEDICAL EXPENSES
IN RETIREMENT.PHOTOGRAPH BY TOM SALYER 04/2020^ KIPLINGER’S PERSONAL FINANCE 45