The Ultimate Guide to the HSA (The Super Retirement Account!)

In this episode of the Personal Finance Podcast, we are going to talk about  Ultimate guide to the HSA and how to supercharge it. How Andrew Can Help You: Listen to The Business Show here. Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining Index Fund Pro! This is Andrew’s course teaching you how to invest! Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok. Learn how to get out of Debt by joining our Free Course Leave Feedback or Episode Requests here. Car buying Calculator here Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at shopify.com/pfp Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Thanks to Fundrise for Sponsoring the show! Invest in real estate going to fundrise.com/pfp Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. Go to https://joindeleteme.com/PFP20/ for 20% off! Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Turn your business dream into reality! Apply now at www.oneday.org/pfp Go to Acorns.com/pfp and start automating your investments and get a $5 bonus today! Delete Me: Use Promo Code PFP for 20% off! Shop Data Plans and Save Big at mintmobile.com/pfp Links Mentioned in This Episode: 10 Tips to Optimize Taxes When You Retire Early Relevant Episodes: How to Open an HSA (and Why You Should Consider it!) - Money Q&A Should You Max Out Your Roth IRA or HSA? (Money Q&A) What Do I do With an HSA at an Old Employer?! (Plus How to Avoid RMD's) - Money Q&A Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel Free Guides: The Stairway to Wealth: The Order of Operations for your Money How to Negotiate Your Salary The 75 Day Money Challenge Get out Of Debt Fast Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Giancola?

  Longtime listeners know, one of the best ways to build wealth is to increase your income. And one way to do that is by starting a side hustle. And that's one reason why I absolutely love Whatnot. Now, my son and I, we love collecting sports cards. And we've used Whatnot to buy and sell cards. It's been a really fun way to enjoy something we love together. Now, Whatnot is a live shopping platform where people sell everything from sports cards to clothing, electronics, and collectibles. And what's really cool about it is you can turn something you're passionate about into a business. And you could do it right from your phone. You don't even need a storefront or a website. So whether you're looking to make some extra money or find great deals on your next shopping trip, check out Whatnot.

• 0:44Andrew Giancola?

  Search Whatnot, that's W H A T N O T, in the App Store. Download and start selling right away. When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI website builder.

• 1:27Andrew Giancola?

  I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer or developer needed. And Hostinger doesn't stop at launch. Their AI can help with SEO, website copy, email marketing, and more. Plus, your domain, website, email, and marketing can all live in one account, with plans starting at just $3 every single month. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/pfp and use code PFP for 10% off now. On this episode of the Personal Finance Podcast, the ultimate guide to the HSA and how to supercharge it.

• 2:25Andrew Giancola?

  What's up everybody? Welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.co. And today on the Personal Finance Podcast, we're going to talk through the ultimate guide to the HSA and how to supercharge it. If you guys have any questions, make sure you join the Master Money Newsletter by going to MasterMoney.co/newsletter and you can reply with your questions there. And don't forget to follow us on Spotify, Apple Podcasts, YouTube, or whatever your favorite podcast player is. And if you want to help out the show, consider leaving a five-star rating and review on Apple Podcasts or Spotify. It truly does help us spread this message.

• 3:09Andrew Giancola?

  Cannot thank you guys enough for leaving those five-star ratings and reviews. Now, I am pumped for today's episode because we are going to be giving you the ultimate guide to the HSA or the Health Savings Account. And I'm going to show you why I call this the Super Retirement Account. Now, the HSA is the most underutilized retirement account that is out there. Yes, you are hearing me say a Health Savings Account is a retirement account. And the reason for that is because there are so many very cool things that you can do with this account. Now, there are 178 million Americans that have health insurance,

• 3:50Andrew Giancola?

  and only 37 million of them have an HSA. And just 9% of those who actually have an HSA are using it to its full potential. And so what I'm going to do is I'm going to break down how to use an HSA to its full potential, how to supercharge it, some of those common pitfalls that I think a lot of people fall into, and how to turn it into the most powerful investment vehicle out there. In fact, the HSA is probably my favorite account overall, but not everybody qualifies for an HSA. And so we're going to dive into how that works in this episode. Without further ado, let's get into it.

• 4:27Andrew Giancola?

  Okay, so the first thing that I want you to understand is HSA stands for Health Savings Account. And this is a tax advantaged savings account that is available to individuals enrolled in a high deductible health plan. Now, this allows you to contribute pre-tax dollars to pay for qualified medical expenses, including medical, dental, and vision care, as well as prescription drugs and over-the-counter health products. But here's the thing, and here's how an HSA works. Money goes in and you get a tax deduction when you contribute to an HSA. The money grows tax-free. You can actually invest your dollars inside of an HSA, and the money will grow tax-free, and you can pull the money out tax-free as long as you have a qualified medical expense, which we will get into more as this episode goes

• 5:13Andrew Giancola?

  on here. Now, this is very powerful, because what that means is that an HSA has triple tax benefits. A Roth IRA does not have triple tax benefits. A 401K does not have triple tax benefits. A traditional IRA does not have triple tax benefits. This is the highest level of tax benefits that you can get within a retirement account. Now, one big thing up top that I want most people to understand as well is an HSA and an FSA, a flexible spending account, are two totally different accounts, okay? The FSA, a flexible spending account, is an account that when you put money into your FSA, you gotta either use it or you lose it, meaning that when money goes

• 5:55Andrew Giancola?

  in to that flexible spending account, you gotta use those dollars every year. Whereas an HSA, it rolls over every single year, so you can keep those dollars invested, and it stays with you even if you change jobs. And so this is something that can grow over time. Now, who qualifies for an HSA? This is gonna be a huge thing. You must be enrolled in a high deductible health plan to qualify for an HSA. Now, what is a high deductible health plan? You can ask your current health insurance provider or your HR department, "Am I in a high deductible health plan?" But typically, what a high deductible health plan means is that you pay more out-of-pocket for health expenses before your insurance actually kicks in. So if you know, like, when you go to open enrollment every single year, if you go to select your

• 6:36Andrew Giancola?

  Health insurance, you see all these different plans and some of them you may be paying more out of pocket to go for a doctor's visit or to go to the ER or if you ever had an emergency and you had to take a ride in an ambulance, all of those different plans, some are high deductible health plans and some have a standard deductible. And so the high deductible health plans mean you pay more out of pocket upfront. So a lot of people who are younger, for example, are going to get a high deductible health plan because they don't visit the doctor as much. And so they don't have as much healthcare expenses that they need to spend money on. And so they're willing to take the risk of, hey, I'm going to spend the max $8,000 per year in healthcare expenses, but I really don't go to the doctor much. I do my yearly checkup and that's about

• 7:18Andrew Giancola?

  it. And so I'm willing to take on that risk to spend less out of pocket every single month in order to hopefully not spend more out of pocket later on down the line. And so that is how a high deductible health plan actually works. And so you must be enrolled in a high deductible health plan to have an HSA. And so as your HSA grows and as you develop a larger HSA, then you can even as you age enroll in a high deductible health plan if that fits your criteria. Number two, to contribute to an HSA, you cannot be enrolled in Medicare. If you are in Medicare, you cannot contribute to an HSA because you're already getting a percentage of your healthcare covered. And so you do not have access to an HSA. Number

• 8:00Andrew Giancola?

  three is you cannot be claimed as a dependent on someone else's tax return. So if you are dependent on someone else's tax return, if your parents still claim you as a dependent, or if you are someone who, for whatever else reason, is claimed as a dependent, you cannot contribute to an HSA. Number four is you must not have other health coverage unless it's permitted coverage like dental or vision insurance. So those are the big four criteria to qualify for an HSA. The biggest one, though, is the high deductible health plan and Medicare. Those are the two that a lot of people will fall into those categories where maybe you have a standard deduction health plan and/or you are someone who participates in Medicare. And if that's the case, then you cannot do that. Now, what is the minimum deductible

• 8:44Andrew Giancola?

  to qualify in 2025? So for an individual, the minimum deductible is 1,650 and for a family, it is $3,300. Now, the maximum out of pocket for eligibility is 8,300 and for a family, it's 16,600. So you can check with your employer or you can go to healthcare.gov to ensure your plan is HSA eligible. So those are the two places that you can go, healthcare.gov or your HR department if your HSA is through your company. So let's get into now how much you can contribute to an HSA in 2025. And then we're going to start to get into some of these amazing advantages and how you can really build massive amounts of wealth with your HSA.

• 9:27Andrew Giancola?

  All right. So in 2025, HSAs have contribution limits, just like Roth IRAs, just like 401Ks. Anytime there is some tax advantages in an account, the IRS is going to dictate how much you can put in there. They don't want you to be able to just put hundreds of thousands, if not millions and millions of dollars. Otherwise, every really wealthy billionaire would be sticking their money into these accounts. And so the first is for individual coverage. So if you have an individual coverage plan, maybe you're single, you just cover yourself. Then the contribution limit for 2025, at the time of recording this, is $4,300. Now for family coverage, it is $8,550.

• 10:08Andrew Giancola?

  And if you are over the age of 55, you can actually have a $1,000 catch-up contribution. So every person out there who is over the age of 55, listening to this podcast, you need to make sure that you are taking advantage of that $1,000 catch-up contributions. Now employer contributions count towards the total limit, so make sure that you note that. Because if your employer is matching you in some way, shape or form, or if they're helping you contribute to your HSA every year, those contributions do count towards your limit every single year. Now, anyone, including your family members, can contribute to your HSA, providing that you're eligible. Now contributions must be in cash and they're allowed up to the tax filing deadline.

• 10:50Andrew Giancola?

  So April 15th of 2026 for the 2025 tax year, but it's all the way up till tax day. Is when you can contribute to these accounts. Now, why is the HSA so amazing? It's that triple tax advantage that we keep talking about. So contributions are tax deductible. And so it's either pre-tax or it's through your payroll. So if your payroll contributes, then it's pre-tax. Or it's tax deductible if it's after you've already been taxed on your paycheck. Now, growth is also tax-free if it is invested, which is absolutely amazing. So it's got the power, pre-tax power of a 401K. It's got the tax-free growth power like a Roth IRA. And withdrawals for qualified medical expenses are tax-free. Now, there is an exception here.

• 11:35Andrew Giancola?

  It's California and New Jersey do not recognize HSA tax benefits at the state level. So that's just one big note. If you're in California or New Jersey, which already has really high taxes. Those two states do not recognize the tax benefits only at the state level. Now, there are no required minimum distributions within HSA. So this is the beautiful thing about an HSA that I want you to understand. Let's say, for example, and we'll probably talk about more about this again later on in this episode. But let's say, for example, you built up this massive HSA and you're like, well, how do I have enough qualified medical expenses in this HSA? To be able to actually use this and withdraw all this money? Well, what happens is this HSA basically turns into something like a traditional IRA or your 401K. Where you're going to get taxed when you pull the money out.

• 12:20Andrew Giancola?

  Okay, so you get to the age where you're going to start withdrawing on your HSA. You're going to get taxed when you pull that money out. But there are no required minimum distributions in an HSA like there are with a 401K and an IRA. So instead, you don't have that RMD issue. So essentially, at the age of 65, if you want to start using this money for retirement income, you can do so. You just pay your taxes on that money. But there are no RMDs, so it's not required to draw down a certain percentage every year. This provides you with way more flexibility than you would have with a 401K or a traditional IRA. So let's go through six ways to maximize your HSA in 2025. Because this is something I want you to note for the future, that you can maximize them right now.

• 13:05Andrew Giancola?

  So number one is to contribute. Tribute to the maximum. So what level should you contribute to your HSA? So if you've ever heard us talk through the order that we like to invest our dollars. To start, we want you to get your 401k match. We always want you to do that because it's 100% free money. Those are dollars that will grow over time. And if somebody said, hey, if you give me a hundred dollars, I'll give you $200 back. What would you say? I would say, heck yeah, I would do that every single day, all day, every day. I would get 100% rate of return. Well, that's what you're doing with your 401k match. But second, what do you do once you get that match? Then I'd be looking at the HSA and the Roth IRA. Those are at the same level to me, and I would look at one or the other.

• 13:45Andrew Giancola?

  If you have a high deductible health plan, an HSA is fantastic for you to look at starting to contribute dollars towards that. Or if you're interested in growing your wealth tax-free and not worrying about the qualified medical expenses and all those different things, then a Roth IRA is also great. But it would be at that first initial level is when I'd be looking at. Then I'd go back to your 401k and look at that level. So ways to maximize it is first to contribute the maximum. Again, the maximum for 2025, which is the time I'm recording this, for individuals is $4,300 and $8,550 for families. And if you're over the age of 50, there's a $1,000 catch-up contribution. Why? If you max this out, you can start to take advantage of compound interest early inside of these accounts.

• 14:28Andrew Giancola?

  You don't get the years back that you missed. So you want to start to get your dollars in these accounts to start to grow over time. Okay? Secondly, if your employer has an HSA match, which some employers do, there's HSA matches out there that they allow you to contribute a, maybe a thousand dollars per year, and they'll put a thousand dollars in there. Absolutely 100% do that every single time, all day, every day. Always make sure that you can get your employer's match contribution. This is going to help you supercharge your HSA, get more dollars in the HSA that you would not have to earn. So I want you to make sure that you are doing that over time. Now, one big thing I also want you to do is contribute at least the amount of your high deductible health plans deductible.

• 15:13Andrew Giancola?

  This is a really good rule because if you do that, then You are always prepared for out of pocket costs if they catch you off guard. So one thing is I don't utilize my HSA for healthcare expenses right now. I will be utilizing it for healthcare expenses in the future. And I'm saving my receipts, which we will talk about in a second. But if you get yourself in a bind, this is also a way that you can utilize it as a medical emergency fund. So if you're putting in your deductible every single year, and at least at a minimum, you have your deductible inside of that HSA, you'll be able to cover medical expenses and still get the tax benefits that is so coveted inside of the HSA. Next is I would aim for the out of pocket max, meaning that I would contribute enough over time

• 15:59Andrew Giancola?

  to eventually cover your full out of pocket limit. Now, this prepares you for any of those medical emergencies as time goes on. So I would actually build this up as a medical emergency fund first. And then from there, you can utilize it for some additional things that we're about to talk about here. And then five is investing for the long term. So this is a amazing way to maximize your HSA is to invest those dollars in the HSA. So you have your out of pox max, and maybe you keep that as your emergency fund and everything else outside of that. Then you go and you invest those dollars and allow them to grow over time. And then you can reimburse yourself later. So you can save your receipts for medical expenses that you pay today, and you can reimburse yourself later. Now, here's the beautiful thing about the reimbursement process that I want you to talk through here upfront

• 16:44Andrew Giancola?

  is that the IRS has no limit or limit on dates on how old the medical expense has to be. So you could break your arm when you're 23 years old, save all of those receipts for those medical expenses, and you can reimburse yourself when you're 75 years old. This is the power of the HSA because those are tax-free dollars that you can reimburse yourself with. Or let's say, for example, that you had some sort of knee surgery. You know, maybe you were doing something, working out, you were on the squat rack, you did a squat. All of a sudden, your knee blew. Well, if that happened and you had some major medical surgery that costs you thousands of dollars, then all of a sudden, you can reimburse yourself later on down the line and get those tax benefits. So it's really, really powerful what you can do.

• 17:25Andrew Giancola?

  Now, the IRS has a laundry list of what is considered a qualified medical expense. And we'll talk about some ways to look that up here coming up. So those are six different ways to maximize your HSA in 2025. I'm going to show you my system on how I use the HSA and how we can start supercharging this thing.

• 17:44Andrew Giancola?

  Now, there are three ways that you can use your HSA. And the way you use your HSA is going to dictate how big you can actually make this account. Now, the first one is short-term spending. I think this is what a lot of people think the HSA is for, is you pay for your medical expenses now using your HSA card and you get some of those tax benefits. This is what most people do when they're not educated on the power of the HSA, is they just use it as their checking account for their medical expenses and they just spend dollars on that. They're not taking the benefits of the tax-free growth and they're not really seeing the big picture. And it's just really because most people don't talk about the HSA and they just don't have that financial education. Secondly, is some people will save it in cash and they let their balance grow slowly, not realizing that they could invest those dollars over time.

• 18:28Andrew Giancola?

  So maybe they're just putting some cash in every single year in their HSA, but they don't realize that they can actually invest those dollars. But for most of you, here's what I want you to take away. And I'm going to show you my system in a second. But I want you to supercharge your HSA. Well, how do you do that? You invest your HSA and pay for out-of-pocket medical costs now, and then you let your HSA balance grow for your future. So let me show you exactly how this works. I want you to think about this and I want you to reframe the HSA in your mind as a health investment account, okay? HIA, let's call it the HIA. I want you to treat your HSA just like you would your Roth IRA. Now, here's how this works. You're going to pay for medical expenses for out-of-pocket. So let's say you have a prescription or you have something come up where you have a doctor's visit,

• 19:13Andrew Giancola?

  or maybe you have a 911 call because you had some sort of medical scare. And so if any of those things happen, you're going to go and pay for those medical expenses out of pocket. You're like, well, why am I saving this money then? What is the purpose of even saving this money? You're going to see, but all your medical expenses will be paid out of pocket. Then, secondly, I want you to save your receipts. So I want you to get a Google Drive folder, or a Dropbox folder, or Notion, or whatever else that you utilize to organize your life. And I want you to save all of your medical receipts. I don't care how small or how big it is. I want you to save those receipts. And I'll talk even more about my receipt-saving system coming up here in a second. Then, I want you to find a place that you can actually invest your HSA. There's a lot of different places to go. I like Fidelity.

• 19:56Andrew Giancola?

  Fidelity is my favorite place to hold an HSA. They have the best investment options and they have the lowest fees, which are the two things that I look at, but you want to be able to find somewhere you can invest your HSA at low cost. There are a lot of HSAs out there who have terrible investment products, meaning you can't invest in things like index funds or ETFs. And you can't invest in things that actually truly matter. And so what I want you to understand is that you want to make sure that you are looking at those fees and finding a place to open your HSA that makes sense. Then decades down the line, your money is growing. You have those dollars invested and it is growing over time. Then you can reimburse yourself later. You have those receipts saved and so you have proof if the IRS comes a-knocking and saying, hey, what are you reimbursing yourself for?

• 20:40Andrew Giancola?

  You have those receipts saved. So let's say, for example, you have a $2,000 medical expense that popped up. Well, if you have a $2,000 out-of-pocket medical expense, you can let that grow. And if you did not use it from your HSA and you let it grow at 7% over the course of 30 years, the result is 30 years later, that $2,000 expense has grown at a 7% rate of return and it is now worth $15,000. And so these HSAs can actually grow very, very large, depending on how much you are putting in your HSA. So next, what I'm going to do is I'm going to get into how to track your receipts for future reimbursement. I'm going to give you my whole system now. All right. So when I track, my relationship with money has changed a lot over the years. Early on, I thought building wealth was about making more money.

• 21:24Andrew Giancola?

  Now I know it's really about having clarity. When you know exactly where your money is going and whether you're on track, you make better decisions. That's one of the reasons I love Monarch. It's the personal finance app that tracks everything from your accounts and investments to your savings, goals and spending. So you can see your entire financial picture in one place. One habit that's made a huge difference for me is my five-minute drill every single morning. I open Monarch, check my spending, investments, cash flow and net worth, and I'm done in just a few minutes. It gives me confidence that nothing is slipping through the cracks. I also love the AI weekly recap because it'll flag spending changes. Upcoming expenses or shifts in my net worth before they become a problem.

• 22:08Andrew Giancola?

  Instead of reacting after the fact, I can make adjustments early. It really feels like having a financial advisor in your pocket. Write your own money story with Monarch. Use code PFP at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code PFP. It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like PolicyGenius. See, PolicyGenius isn't an insurance company.

• 22:52Andrew Giancola?

  They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free. And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen. It's about knowing my family is protected so I can actually enjoy these moments together instead of worrying about what comes next. And with PolicyGenius, you can find 20-year life insurance policies starting at just $276 a year for $1 million of coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com.

• 23:37Andrew Giancola?

  If you've been listening to this show for a while, you know it's not just me anymore. It takes a great team behind the scenes to make everything happen. And if I had to hire someone tomorrow, I'd want someone who could jump right in and make an impact. That's why I'd use Indeed Sponsored Jobs. When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results so you're spending less time searching and more time interviewing the right people. Plus, you only pay for results, which I absolutely love. Sponsored jobs posted directly on Indeed are 95% more likely to A higher than non-sponsored posts. That's a huge advantage when you're trying to grow your business.

• 24:20Andrew Giancola?

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• 24:56Speaker 01

  Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.

• 25:09Speaker 02

  Price and participation may vary. Promotion pricing may be lower than meal pricing.

• 25:11Andrew Giancola?

  My receipts, I do two different things. One is I set it up in Google Drive. You can use whatever else you want, whatever your life is in. It doesn't matter what the system is, but I just utilize Google Drive and I have two folders in Google Drive. And I do this by year, just to kind of have it available. By year, I guess is not really necessary, but one folder is called to be paid out. And the second folder is called paid out. Okay. So to be paid out is all the receipts for the year, all the medical receipts that I have not paid myself in yet. Then once I pay myself and reimburse myself based on that medical receipt, then I move it over to paid out. Now, what I do is every single medical receipt that I get, I scan a photo and I organize it accordingly. So a lot of times like your doctor's office, for example, will just email you a receipt.

• 25:56Andrew Giancola?

  That's what I try to get them to do. Then I just download it and throw it into Google Drive really quick. And it just really takes someone just taking the extra step, that extra second to put it inside of that folder. Then for visibility, and I want to know how much I have available to be able to reimburse myself. I will track this in a spreadsheet. So on this spreadsheet, it will literally do three things. Okay. I will put the date. I will put some sort of title on that spreadsheet and then I will put a Link to the actual receipt. That's all it is. And then I will put the total amount that I paid to that medical provider. And the reason why I do this personally is I want to know how much I have available to reimburse myself.

• 26:37Andrew Giancola?

  Because over the years, it starts to get confusing on how much you have spent in medical expenses. And so as this spreadsheet starts to build up, maybe you just started this process. So the first year, you spend $1,500 in medical receipts. And you're going to see there's a lot more things that actually qualify for an HSA than just, you know, your standard doctor's visits. You'll see that there are a lot of things that you buy normally that you may not realize are actually qualifying for an HSA. And so in that spreadsheet, that's all I put in there is kind of having that all available in one spot. And typically, if I, for example, have a medical purchase, I'll just utilize that in my five-minute drill. So part of my five-minute drill, which is our daily five minutes that we just work on our finances, during that five-minute drill, I will move that receipt over in the Google Drive folder.

• 27:19Andrew Giancola?

  So it's a very simple system. It's just a Google Drive folder and a spreadsheet. It's titled HSA. It's got to be paid out and paid out. That's all it has to say. You got your spreadsheet there. Literally, it'll take you less than a minute or two a month. And then you have this organized system that allows you to see how much progress you have made within your HSA and how much you can reimburse yourself for. So that's really, really great. That is my favorite system and the way that I set this up. Now, let's talk about choosing your HSA provider, because it's really important to make sure that you choose the right provider that is going to allow you to get the right outcome with your HSA. So Fidelity has an HSA platform. This is not sponsored. This is just a person who loves Fidelity's HSA platform that offers additional benefits

• 28:03Andrew Giancola?

  that kind of set it apart. Number one is it's got great investments in the HSA. So it has index funds, ETFs, those types of things that you can actually invest in, and they're very low cost, which is very important with an HSA. You want to make sure that you are not spending too much in fees for your investments inside of your HSA. But if you stick with Fidelity, Fidelity actually also has a tracking system that allows you to track your expenses. You can upload your receipts. You can pay bills, and you can confirm if purchases are HSA qualified by scanning those barcodes in. So it's actually a very Very, very cool system. They have a Fidelity Health app that will do this for you. So you can make it really, really quick and easy. Now, most employer chosen HSA providers charge unnecessary fees. And a lot of times your employer HSA provider may be doing this,

• 28:48Andrew Giancola?

  or they're going to force you to hold specific cash balances. That's not what we want with our HSA providers. We want to make sure that they allow us to do what we want with our money and invest as many of those dollars as we possibly can. And so the Fidelity HSA, not Fidelity Go, but the Fidelity HSA is the one that I absolutely love. Because it has the no minimum cash balance required. It has low fees and solid investment options. And if you go online and look at some of the best HSA accounts, Fidelity is always at the top of the list, and it's because of those reasons. So that's the only one I recommend, to be honest. The other ones that are out there just have too many fees. Now, if you're self-employed, you can go into Fidelity and choose an HSA plan manually. And you can contribute post-tax and then deduct it on your return. So if you're contributing to your HSA post-tax,

• 29:32Andrew Giancola?

  you're just going to get a form that you fill out for your HSA from the IRS come tax time, and it'll come up. So like TurboTax, all those different places will ask you if you have an HSA, and they'll give you that form so that you can fill it out. A lot of times Fidelity will give you those tax forms to, to help you through this. Now, what are some rules and warnings that I want you to kind of think through with an HSA? First is to contribute in any month, you must be covered by the high deductible health plan. So number one, I'm going to keep saying that because you got to remember that. Two, you can transfer or roll over an HSA from a high fee provider to Fidelity after leaving your employer. So if you are at an employer that has a really high fee HSA, I would just roll that thing over if you can later on down the line. And then always make sure you retain your HSA tax firms, forms, which usually they will come up.

• 30:17Andrew Giancola?

  Form 5498 SA is for contributions. And Form 1099 SA is for distributions. And the IRS form that I was just talking about is 8889 with your taxes if you contribute or withdraw. Only the qualified medical expenses are tax-free. The cool thing is your account is portable if you change jobs. So if you switch jobs, you can move that account around. It is very portable. Now, surviving spouses can inherit an HSA completely. tax-free, which is another huge benefit when it comes to estate planning is your spouse can inherit your HSA tax-free and non-spouse beneficiaries are taxed on the HSA's value upon death. So if you have an HSA and you want to hand it down to your kids, they will be taxed on those

• 31:01Andrew Giancola?

  dollars upon your death. That's one other thing you want to look at. Now let's talk about qualified medical expenses because there is a laundry list of qualified medical expenses when it comes to the HSA. Now, the IRS has a huge list of qualified medical expense, but there are so many different things that would qualify for this that it is absolutely amazing. So it's things from even acupuncture, ambulance rides, obviously, you know, artificial teeth, birth control treatment, blood sugar tests, breast pumps, chiropractor visits, x-rays, dental treatments, laser eye surgery, laboratory fees, guide dogs, physical therapy, psychiatric care, psychologists, vaccines, vasectomies, visions, vision care. There are so many different things

• 31:45Andrew Giancola?

  that would qualify that you'd probably think would qualify, but also common over-the-counter medicines will qualify, things like cold and flu medicine, eye drops, lice treatments, baby rash ointments, sleep aids, stomach remedies, pain relievers like ibuprofen also qualify. There are also services that may be eligible with a letter of medical necessity. So weight loss programs, massage treatments, CPR classes for children. There's also eligible dependent care expenses, things like au pair services, babysitting services, before and after school programs. There's nursery school, pre-kindergarten, summer day camp, and tons of other things that could be qualified in the HSA, the HRA, or the FSA. So a lot of those are, they could be qualified. So here's a couple of things that you can think through here. One great thing is Amazon actually

• 32:29Andrew Giancola?

  has an HSA page. So if you go to amazon.com/health spinning account items, they have an entire HSA section. And the cool thing is now when you're looking to buy something on Amazon, they actually have something that says HSA eligible. So I pulled up the site that shows you right there. Like the first thing is Crest White Strips is actually HSA eligible. And so there's all these different things that you can look at here that Allow you to contribute to an HSA, a no-touch thermometer for kids, a first aid kit, Neosporin. There are so many different things, Ibuprofen on here, that you're actually allowed to utilize for an HSA. Hydration packs, so like LMMT and all those different little hydration sticks are HSA eligible.

• 33:12Andrew Giancola?

  A massage gun. Claritin. If you have allergies, you know, you're probably spending buku dollars on Claritin. A electric toothbrush is HSA eligible. A essential oil diffuser is HSA eligible. A heating pad is HSA eligible. A scale, a body scale is HSA eligible. And so the list goes on and on and on. So you're going to realize pretty quickly that there is a lot of common items that you are using day in and day out that are actually HSA eligible. And so your qualified medical expense list is going to grow more and more and more. So I highly recommend you going to Amazon's HSA site just to kind of get an idea of some of these products that should be HSA eligible. And I actually utilize this a ton when I am trying to figure out,

• 33:55Andrew Giancola?

  hey, what actually is qualified? I will actually Google it on Amazon. And if you look, there's a little badge when you're shopping on Amazon that will say this is actually HSA eligible. And so it is something I would definitely, definitely, highly recommend most of you go and look at because I use it all the time. And so you can always keep those receipts and documentation is going to be super, super easy. So you can either use my Google Drive system or if you're with somebody like Fidelity, you can keep it in there as long as you're staying with him. The big thing though, is if you are using your provider, you need to make sure that you're staying with them long-term because some of these providers will not keep your information if you leave. And so that's why I use the Google Drive system because most of these providers would not give you access if you left them. So that's really, really important to understand as well.

• 34:38Andrew Giancola?

  Now, how powerful can this be? Like if you're going through this process and you're like, alright, you convinced me to utilize an HSA, but how much can I actually have in an HSA? Let's say you maxed out the individual contribution at $358 per month and over the course of 30 years, you got a 7% rate of return. You can have $405,000 over the course of 30 years in your HSA with triple tax benefits. And if you're healthy and if you're investing through an HSA, This is arguably better than a 401k and a Roth IRA. We could have arguments about this all day long. A lot of people that I have talked to actually like the HSA more than the other two. Now, the pros, the big pros are obviously the triple tax advantages. We've been talking about that the entire episode. Contributions are vested and they roll over year over year.

• 35:22Andrew Giancola?

  Three is the investment potential within the HSA that you get that tax-free growth. The portability, if you change jobs, is really, really powerful. You can use in retirement without penalty and it basically transforms into a traditional IRA. And it complements other retirement accounts. There are so many amazing benefits to the HSA that help you complement your other retirement accounts. I like having the HSA, the Roth and the 401k. That's the triple combination that I love having. Now, there are cons to the HSA, like it requires a high deductible health plan. You must have extra cash to fund your HSA, obviously outside of your retirement accounts. The record keeping is a little bit annoying. It's obviously an extra step and some people who are not type A may not be willing to do that. And so you got to make sure that you take that extra step.

• 36:04Andrew Giancola?

  There are strict tax penalties for non-qualified withdrawals. And there's lower contribution limits compared to a 401k or IRA. So those are just some of the cons, but I really like to utilize an HSA and I integrate it into my retirement plan because it gives you additional flexibility. So let's think about this for a second. Let's say that you decide that you're going to retire early. Well, if you retire early and you have a taxable brokerage account and that's helping you through some of this process, but you don't want to start drawing down, obviously on your 401k or on your Roth IRA because you're trying to allow those to grow until you hit the age 59 and a half, when you can then withdraw some of this contribution. So what do you do? Well, if you have an HSA, you can start to withdraw on that first with your qualified medical expenses

• 36:49Andrew Giancola?

  because this is going to allow you to get some flexibility in early retirement. So it's another great tool for early retirement if you were thinking about that. And listen, healthcare costs are rising at 7% every single year. The inflation rate for healthcare costs is absolutely astronomical. It is one of the biggest problems that we have in this country and worldwide. And nobody is really able to solve that problem. So you have to take your health. Into your own hands by making sure that you have a plan in place to pay for those healthcare expenses. The last thing you want to be doing is being on Medicare or Medicaid and not being able to do the things that you want during retirement age. The HSA gives you that flexibility and allows you to have more cash on hand so that if you wanted to

• 37:32Andrew Giancola?

  go to long-term care somewhere, or if you wanted to take advantage of some of the healthcare advancements that are going to be happening over the course of the next couple of decades, especially with AI, you're going to have the cash there and you'll probably be able to, if you have cash on hand, you'll be able to live longer because you can take advantage of some of these cool healthcare advancements that are going to be happening in the future. So there are so many incredible benefits to the HSA. I'm incorporating it into my retirement plan and it is something that I am really, really bullish on for the future. It is a really powerful tool that I think if you have not looked into or learned about yet, I think you should definitely look deeper into it. It is the super retirement account because those triple tax advantages. And so I hope you learned a ton today in this episode because that was our entire goal. And listen, thank you so much for listening

• 38:17Andrew Giancola?

  to this episode. If you are getting value out of this episode, please share it with a family member or a friend. And don't forget to follow us on Spotify, Apple Podcasts, YouTube, or whatever your favorite podcast player is. Also, if you want daily market news and want to learn more about the market, make sure you're listening to our other show called The Business Show where we give you daily updates on the market and try to help you with an unbiased opinion. So listen, thank you again so much for listening to this podcast and we will see you on the next episode.

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