Most people treat their HSA like a checking account for copays....
Zach Melloh, CFP®@zachmelloh26
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Jan 09, 2026
~2 min read
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Most people treat their HSA like a checking account for copays.
That’s a mistake.
Used correctly, an HSA can quietly become one of the best long-term wealth tools you have.
Here’s what almost no one explains 🧵
That’s a mistake.
Used correctly, an HSA can quietly become one of the best long-term wealth tools you have.
Here’s what almost no one explains 🧵
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First, the basics:
An HSA is the only account that can be:
• Federally & State deductible going in (Exception of CA and NJ)
• tax-free while growing
• tax-free coming out
An HSA is the only account that can be:
• Federally & State deductible going in (Exception of CA and NJ)
• tax-free while growing
• tax-free coming out
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Mistake #1: Using funds immediately
There’s no rule saying you must reimburse expenses right away.
You can:
• pay medical bills out of pocket
• save the receipts
• reimburse yourself years (or decades) later
Meanwhile, the money stays invested and compounding.
There’s no rule saying you must reimburse expenses right away.
You can:
• pay medical bills out of pocket
• save the receipts
• reimburse yourself years (or decades) later
Meanwhile, the money stays invested and compounding.
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Think of it this way:
Your HSA can function like a stealth retirement account with a pile of future tax-free withdrawals backed by old receipts.
Most people never use this feature.
Your HSA can function like a stealth retirement account with a pile of future tax-free withdrawals backed by old receipts.
Most people never use this feature.
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Mistake #2: Thinking it’s only for doctor visits
HSAs cover far more than people realize:
• dental and orthodontics
• vision, LASIK, contacts
• fertility and family planning
• chiropractic, therapy, etc
Medical is broader than you think.
HSAs cover far more than people realize:
• dental and orthodontics
• vision, LASIK, contacts
• fertility and family planning
• chiropractic, therapy, etc
Medical is broader than you think.
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Mistake #3 : Ignoring age 65 rules
After 65:
• medical withdrawals stay tax-free
• non-medical withdrawals are allowed
• no penalty (just ordinary income tax)
At that point, it behaves a lot like a traditional IRA.
After 65:
• medical withdrawals stay tax-free
• non-medical withdrawals are allowed
• no penalty (just ordinary income tax)
At that point, it behaves a lot like a traditional IRA.
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Mistake #4: Thinking your employer controls it
Your HSA is yours. Not your employer’s.
You can:
• roll it over
• move it to a better custodian
• invest it how you want
The account follows you.
Your HSA is yours. Not your employer’s.
You can:
• roll it over
• move it to a better custodian
• invest it how you want
The account follows you.
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If you have a high-deductible health plan and aren’t funding your HSA strategically,
You’re probably leaving one of the most powerful tax tools unused.
You’re probably leaving one of the most powerful tax tools unused.
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If this helped:
• repost the first tweet
• follow for financial planning topics and book and intro meeting
• send this to someone who still uses their HSA like a debit card
• repost the first tweet
• follow for financial planning topics and book and intro meeting
• send this to someone who still uses their HSA like a debit card
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Also - Check out the "highlight" section of my profile for more helpful financial planning content.
