Is a health savings account a good idea in your 20s and 30s?

Advantage to saving early in an HSA

One good reason to contribute to an HSA when you are young is the power of time. When you start saving at an early age, you have the opportunity to let your money compound tax-free for thirty to forty years. That's powerful stuff!

Power of time + Triple tax advantage1 = Your HSA advantage

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Time is on your side
Save while you're young, when you're healthy and your health care costs are lower.

No minimum contribution

Even if you can't afford much now, you can still contribute a small amouny into an HSA.

30 year HSA projection

Chart shows that a $1,000 annual contribution over a 30 year period could potentially build a balance of $75,485 by the time you retire.

Hypothetical example, for illustrative purposes only.
*Assumes 6% rate of return, 3% inflation rate and 15% tax bracket.

Studies show you will need a lot of cash to cover your out-of-pocket health care expenses in retirement. If you contribute $1,000 a year for 30 years, you could build up a balance of $75,485* by the time you retire.

Meet your match

Your employer may also contribute to your HSA. That's more savings for you!

triple tax advantage1

1
Pre-tax
contributions
2
Tax-free interest
and investment earnings
3
Tax-free payments
for qualified
medical expenses

It's yours for life
You can take it with you if you cange jobs.

Invest funds

Tax-free growth potential

1You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. Any interest or earnings on the assets in the account are tax free. You may be able to claim a tax deduction for contributions you, or someone other than your employer, make to your HSA. Bank of America recommends you contact qualified tax or legal counsel before establishing a HSA.