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Health Savings Account

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1. They Treat the HSA Like a Stealth Retirement Account


Most Americans use HSAs to pay for yearly medical expenses.


Rich individuals don’t.


They pay out-of-pocket for medical bills and let their HSA money grow untouched for decades, because:

• Contributions are tax-deductible

• Growth is tax-free

• Withdrawals for medical expenses are tax-free


This is the only account in America with triple tax advantages.


No 401(k).

No IRA.

Not even a Roth IRA comes close in flexibility.


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2. They Invest the HSA (Most People Don’t)


Most people let HSA cash sit idle.


Wealthy individuals invest the entire balance in:

• S&P 500 index funds

• Total stock market funds

• High-yield ETFs

• Sometimes conservative bond ETFs later in life


With decades of compounding, an HSA can grow to $250,000–$500,000 tax-free, assuming consistent contributions.


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3. They Save Their Medical Receipts — But Don’t Get Reimbursed Yet


This is a sophisticated strategy:


They keep all medical receipts in a folder (or digital archive)…

…but they wait YEARS to reimburse themselves.


Why?


Because you can reimburse yourself at any point in the future for a qualified medical expense, as long as:


You had the HSA at the time

You kept the receipt


That means someone could:

• Rack up $20,000 in receipts

• Let their HSA grow for 20 years

• Then reimburse the $20,000 tax-free — effectively making a tax-free withdrawal for any purpose.


This is a legal HSA “loophole” the wealthy maximize.


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4. They Use the HSA to Pay Medicare Premiums in Retirement


After age 65, HSA funds can be used tax-free for:

• Medicare Part B

• Medicare Part D

• Medicare Advantage premiums

• Long-term care insurance premiums (limits apply)


This acts like a private tax-free medical pension.


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5. After Age 65, the HSA Becomes a Traditional IRA (With Bonus Perks)


Once you turn 65:

• You can withdraw HSA funds for any non-medical reason without penalty

• You only pay income tax (just like a traditional IRA)


But unlike an IRA:

• You still get tax-free withdrawals for medical expenses

• And tax-free withdrawals for Medicare premiums

• And tax-free withdrawals for long-term care costs


So the wealthy keep it invested and use it as a medical Roth IRA hybrid.


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6. They Max Out The Family Contribution Every Year


2024 numbers (for example):

• Single: up to $4,150

• Family: up to $8,300

• Age 55+ catch-up: +$1,000


Wealthy families nearly always make:


The maximum contribution

Automatic yearly investments

Minimal withdrawals


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7. They Combine It With a High-Deductible Health Plan (HDHP) Strategically


The wealthy select HDHPs because:

• Premiums are lower

• They can fully fund the HSA

• They can self-insure for small medical costs

• It shifts more money into tax-advantaged investment accounts


Most wealthy people rarely use low-deductible insurance because they prefer tax efficiency to out-of-pocket comfort.


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In Summary — Why the Wealthy Love HSAs


Advantage Why It Matters

Triple tax benefit The strongest tax shelter in the U.S.

Investable Grows like a retirement account

Tax-free spending on medical costs Major expense category for older Americans

Flexible after 65 Works like IRA + medical Roth

Delayed reimbursements Turns old medical receipts into tax-free cash later

No required distributions Unlike 401(k)s and IRAs


For high-income earners, HSAs are free money, reduced taxable income, and a powerful wealth-building tool.


 
 
 

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